A view of Moscow. Gazprom ad is seen on the roof of a house.Photo: Dmitry Dukhanin
Gazprom Spent Too Much
The net profit of Russia’s gas monopoly, Gazprom lowered 25 percent in the second quarter under the International Accounting Standards. The half-year decline was 2.6 percent. The analysts say that exactly the H1 performance is significant for the annual results but caution Gazprom against further surge in the costs. The investors don’t appear agitated either; the stocks of Gazprom grew 4.6 percent to 4.9 percent yesterday on Russia’s exchanges.
Under the accounting report of Gazprom, its net profit shed 25 percent to 102.9 billion rubles in the second quarter of this year. The half-year decline wasn’t so material – 2.6 percent to 313.2 billion rubles. At the same time, Gazprom revenues grew 5 percent both in the second quarter and in the first half of the year.
People in Gazprom blame the slow growth in revenues on warm weather and decline in the gas sales. From January to June, Gazprom sold to Europe 5.5 billion cu meters of gas less than a year earlier, and the sales to CIS narrowed by 0.7 billion cu meters. At the same time, the costs were skyrocketing. Operating costs soared 15 percent on year in the first half of 2007.
The cost of the Asian raw that Gazprom resells grew 44 percent, the salaries of employees were hiked by 19 percent. The amount of funds appropriated for material acquisition stepped up by nearly 8 billion rubles, the amount spent for repair and maintenance increased by 6 billion rubles. Gazprom is also actively investing in its key gas projects. The investments in Sakhalin-2 operator, Sakhalin Energy Investment Company Ltd, reached $956 billion, according to the report.