Gazprom profit up five per cent as rebates drop

RUSSIAN energy giant Gazprom posted a five per cent rise in first-quarter net profit yesterday as higher exports and lower rebates to customers helped it top forecasts.

Gazprom said its net profit attributable to shareholders over the January to March period rose to 381bn roubles (£7.3bn) from 361bn roubles a year earlier.

The result topped the 378bn roubles expected by analysts.

The company has agreed to revise long-term gas supply contracts with customers in Europe, where it generates around 55 per cent of its revenues, making “retroactive payments” to avoid losing business.

It has reserved 200bn roubles for rebates this year.

But it said lower-than-expected payments in the first quarter enabled it to write back some of those provisions, converting them into sales of 73.4bn roubles “reflecting a decrease in a previously accrued liability”.

Gazprom’s shares rose one per cent in early trading, in line with the broader Moscow market.

The company said export sales rose by 11 per cent to 428bn roubles.

Total sales increased to 1.5 trillion roubles from 1.2 trillion, topping the 1.43 trillion forecast by analysts.

Net debt fell by nine per cent over the period, from 1.07 trillion roubles as of 31 December 2012 to 972.4bn roubles as of 31 March. This was the result of an increase in cash and cash equivalents.

Gazprom’s deputy chief executive Alexander Medvedev came under the spotlight in May this year when he accused the European Commission of a politically-motivated attempt to bring down EU gas prices.

The European Commission opened an investigation last September into suspected anti-competitive market practices by Gazprom, stoking tensions in relations between the European Union and its biggest gas supplier.

The Commission said it was concerned Russia was abusing its position and imposing unfair prices.