Gazprom's financial performance

Main article: Gazprom

• History of Gazprom

2024: Net profit tripled in the first half to RUB 1.04 trillion

Gazprom Group more than tripled its net profit in the first half of the year due to increased gas exports through pipelines, high oil sales and the purchase of Shell's former stake in the Sakhalin 2 project.

The net profit of the Russian energy giant for the first 6 months of 2024 amounted to 1.04 trillion rubles ($11.3 billion), compared to 296.2 billion rubles a year earlier.

2023

Gazprom's capital expenditures rose to 3.12 trillion rubles. Where the money went

Capital expenditures of the Gazprom group in 2023 reached a record 3.12 trillion rubles. This is a significant increase compared to the previous year, when capital investments amounted to 2.84 trillion rubles. This is stated in the annual report of the company, published on June 10, 2024.

According to the document, the main part of capital expenditures was directed to the implementation of key projects of the company. In the field of gas production, significant funds were invested in the development drilling and development of the Kovykta gas condensate field (GCM), the Chayandinsky oil and gas condensate field (NGKM) and the Kharasavey gas condensate field. Work was also carried out on the completion of the Bovanenkovsky NGKM and Kirinsky GKM.

Capital expenditures of the Gazprom group in 2023 reached a record 3.12 trillion rubles

The report states that in the production of oil and gas condensate, significant funds were allocated for the development of section 3A of the Achimov deposits and oil deposits of the Urengoy field, the NEOCOM of-Jurassic deposits of the Bovanenkovsky field and the Kharasavey field. Development of Novoportovskiy NGKM and other traditional assets of Gazprom Neft continues.

An important area of ​ ​ investment, according to the report, was the transportation of gas. The construction of the Power of Siberia main gas pipeline continued, as well as the reconstruction of the gas transmission system (GTS) to ensure the supply of ethane-containing gas from the Nadym-Pur-Tazovsky fields to the Baltic Sea coast. The expansion of the Unified Gas Supply System (UGSS) in the southwestern regions of Russia also included the construction of new gasification and gas supply facilities for the regions.

According to Gazprom, significant funds were allocated in the field of gas storage for the construction of underground gas storage facilities (UGS), such as Volgograd, Kaliningrad and Punginskoye UGS. Reconstruction and technical re-equipment of the facilities of the Peschano-Umetsky, Stepnovsky and North-Stavropol UGS was also carried out.^[1]

Revenue fell 27% to 8.54 trillion rubles. The first loss of the Gazprom group since 1999 - 629 billion rubles

The revenue of the Russian group Gazprom, which, in addition to gas, also includes oil and energy companies, fell by 27% to 8.54 trillion rubles. The collapse in revenue was provided by the gas segment, where revenue collapsed to 4.41 trillion vs 7.72 trillion in 2022, while the oil business increased revenue to 3.52 trillion vs 3.39 trillion a year earlier, and the electric power industry - 0.6 trillion vs 0.56 trillion rubles.

Gas export sales collapsed 2.6 times from 7.3 to 2.9 trillion rubles.

Pre-tax loss amounted to 659 billion, compared with a profit of 2.2 trillion in 2022.

Income tax amounted to minus 76 billion (a record return from the budget in history) compared to record taxes in 2022 - 878 billion.

Taxes excluding income tax amounted to 3072 billion vs 3485 billion in 2022, 1539 billion in 2021 and 1235 billion in 2020.

The cumulative net tax in 2023 was 3 trillion vs 4.4 trillion in 2022, 2.15 trillion in 2021 and 1.2 trillion in 2020.

For the first time since 1999, Gazprom reported an annual net loss due to falling supplies to Europe and lower fuel prices.

Net loss reached 629 billion rubles ($6.84 billion) vs profit of 1.22 trillion in 2022 and profit of 2.08 trillion in 2021. Even in a disastrous 2020 with extremely low oil and gas prices, profits were 125 billion.

A significant contribution to the negative result was made by asset impairment losses of 1490 billion vs 1281 billion in 2022, 518 billion in 2021 and only 166 billion in 2020.

The gas business generated a net loss of 1.18 trillion vs 1.17 trillion in 2022, and the oil business and the electric power industry combined to generate 814 billion vs 770 billion in 2022.

Total market debt (loans, bonds and lease obligations) rose to 6.65 trillion rubles vs 5.3 trillion in 2022 and 5.16 trillion in 2021.

Net debt soared to 5.22 trillion vs 4.1 trillion in 2022 and 2.9 trillion in 2021.

The volume of capital spending reached a record of 2.4 trillion vs 2.2 trillion in 2022 and 2.1 trillion.

Free cash flow in deficit by 0.2 trillion - the worst result since 2017

Decrease in revenue of PJSC Gazprom under RAS by 29.6% to 5.62 trillion rubles and profit by 6.9% to 695.67 billion rubles

The revenue of PJSC Gazprom according to Russian accounting standards (RAS) in 2023 amounted to 5.62 trillion rubles, which is 29.6% less than a year earlier.

PJSC Gazprom only sells natural gas and leases its gas transmission system.

The net profit of the holding also decreased - by 6.9%, to 695.57 billion rubles. Such data were released at the end of March 2023.

According to TASS, citing Gazprom's materials, the company's gross profit at the end of 2023 amounted to 1.27 trillion rubles, which is 60% less than a year ago. Profit before taxes during this time fell from 1.02 trillion to 784.59 billion rubles.

Gazprom's revenue under RAS in 2023 amounted to 5.62 trillion rubles

The fall in Gazprom's revenues is due to a decrease in gas supplies to Europe, which cannot compensate for the development of other areas. In the Ukrainian direction alone, the company lost about 5 billion cubic meters per year. Also, the result of 2022 was influenced by deliveries through Nord Stream and the Yamal-Europe gas pipeline.

Another problem was the fall in the cost of gas. The development of liquefied natural gas (LNG) supplies allowed Europe to replace most of the Russian supplies and achieve multiple price reductions, maintaining a record fuel supply in storage facilities.

Gazprom's accounts receivable by the end of 2023 decreased to 2.595 trillion rubles from 2.899 trillion rubles by the end of 2022. At the same time, accounts payable increased to 1.324 trillion rubles from 1.265 trillion rubles.

It also follows from Gazprom's materials that by the end of 2023 the holding's assets reached 26.25 trillion rubles against 24.03 trillion rubles a year earlier. Gazprom's non-current assets are at RUB 22540.44 billion. Current assets decreased by 7.5% to RUB 3807.39 billion. Capital and reserves increased by 4.08% to RUB 17415.46 billion.

Gazprom's long-term liabilities grew by 21.7%, reaching 6.12 trillion rubles. Short-term liabilities are 2.81 trillion rubles (an increase of 23.78%). The company's operating cash flow in 2023 amounted to 998.39 billion rubles.^[2]

Reduction of the investment program by 334.3 billion rubles to 1.97 trillion rubles

Gazprom reduced the investment program for 2023 by 334.3 billion rubles, its volume amounted to 1.97 trillion rubles. The company announced the corresponding decision of the board of directors on October 24, 2023.

As specified in the press service of Gazprom, the adjustment of the parameters of the investment program is associated, in particular, with a change in macroeconomic indicators and market conditions.

Deputy Chairman of the Board of Gazprom Famil Sadygov added that the new version of the budget reflects a decrease in revenues from gas sales due to a decrease in market prices in the first half of 2023.

The approved financial plan will provide coverage for Gazprom's obligations without a deficit, in full. Decisions to attract borrowed funds within the framework of the borrowing program are planned to be made based on market conditions, liquidity and financing needs of PJSC Gazprom, the state-owned companies added.

Gazprom's investment program for 2023 provides funds to finance priority projects. Among them: the further development of new gas production centers - Yamal, Yakutsk and Irkutsk, the Power of Siberia main gas pipeline, Gazprom's gas processing complex, as well as projects that ensure peak gas balance.

Gazprom cut its investment program after the company recorded a net profit of 296 billion rubles in the first half of 2023. This is the minimum result for this period in three years. The drop in profit is largely due to the depreciation of the ruble for the period by 24% against the dollar and by 26% against the euro, said Deputy Chairman of the Board of Gazprom Famil Sadygov. Gazprom's profit decreased due to a sharp decrease in gas supplies to Europe. The result for January - June 2023 was below the market average forecast of 363 billion rubles, Interfax pointed out. ^[3]

2022

41% decline in IFRS profit to 1.226 trillion

Gazprom's net profit according to international standards (IFRS) for 2022 decreased by 41% to 1.226 trillion rubles from 2.093 trillion rubles in 2021.

Gazprom's investments in 2023 could amount to a record 3.056 trillion rubles, including for gas, oil, electric generating, heat generating and other assets.

Gazprom's board of directors recommended that the annual meeting of shareholders not pay the final dividends for 2022 in addition to those already paid for the first half of the year, the issuer reports.

Revenue growth by 25% to 7.98 trillion rubles

At the end of 2022, Gazprom raised 7.98 trillion rubles, which is 25% more than a year earlier. The company's net profit amounted to 747 billion rubles, while in 2021 it was measured at 2.68 trillion rubles. Such data were released in mid-March 2023.

The company's gross profit fell by 12%, to 3.21 trillion rubles, profit before taxes - 1.02 trillion rubles against 3.2 trillion rubles in 2021. The cost of sales increased 4.77 trillion rubles, which is 73.5% more than in 2021.

Gazprom produced 412.6 billion cubic meters in 2022. m of gas, and gas exports to non-CIS countries amounted to 100.9 billion cubic meters by the end of the year. M. The drop in production compared to 2021 was about 20%, and exports - by 45.5%. Thus, gas exports by Gazprom in 2022 became the minimum for the company in the 21st century, and production - at least over the past 15 years. Deliveries from the gas transmission system to Russian consumers amounted to 243 billion cubic meters. m of gas.

Task No. 1 for us is reliable gas supply to Russian consumers. We, as always, confidently fulfilled it, - said the head of the holding Alexey Miller.

Also, by the end of 2022, the Gazprom group paid more than 5 trillion rubles to the budgets of all levels. In 2022, gas pipelines were built to more than 450 settlements, mainly villages and villages.

Gazprom says that the prospects for gas consumption growth in the world are mainly related to Asia, primarily China, so Gazprom is strengthening its position in this direction. Gazprom is increasing gas exports to China through the Power of Siberia-1 main gas pipeline (IHL). In 2022, at the request of the Chinese side, deliveries regularly went over the daily contractual quantities and, as a result, Gazprom exceeded its annual obligations.^[4]

Russia's largest taxpayer - 6.6 trillion rubles

Main article: Taxes in Russia

Gazprom paid over 6.6 trillion rubles of taxes and fees to the budgets of all levels of the Russian Federation, becoming the most significant taxpayer in Russia, forming over 12.4% of the consolidated budget of Russia.

In the reporting for 2022, Gazprom did not disclose all taxes, but knowing the structure of payments, you can restore the overall picture with quite high accuracy:

• MET amounted to 2.89 trillion (of which 1.2 trillion of additional fees at the end of 2022), compared with 1.36 trillion in 2021

• Customs duties - 1.64 trillion vs 1.08 trillion for gas, and taking into account oil and oil products 1.8 trillion vs 1.23 trillion

• Income tax including deferred tax - 879 billion vs 610.4 billion

• Property tax - 245.7 billion vs 140.7 billion

• Excise tax - return of 354.6 billion vs return of 39.4 billion in 2021

• Insurance payments and personal income tax for employees - about 300 billion vs 269 billion

• VAT - about 170 billion vs 145 billion

• Others - 89.3 billion vs 80.5 billion.

• Dividends - 562 billion vs 157 billion.

In total, about 6.6 trillion in 2022 compared to 3.95 trillion in 2021, where the entire increase occurred on MET (+ 1.53 trillion), customs duties (+ 0.57 trillion), income tax (+ 0.26 trillion) and dividends (+ 0.4 trillion).

Relative to gross revenues, taxes, fees and dividends amounted to 48%, compared with 35-36% in 2021.

Additional payments to Gazprom save the Russian budget

The Russian federal budget ended November 2022 with a surplus of 428 billion, which is even higher than last year, when there was a surplus of 352 billion. Almost half of all federal budget revenues were formed by only one company - Gazprom.

In November, Gazprom's dividends over 600 billion and another 416 billion excess withdrawals under MET were credited to the accounts of the Ministry of Finance, which were distributed in uniform tranches from October to December inclusive.

All this without taking into account the planned taxes that Gazprom pays. Only one company and half the budget, given the revenues associated with the domestic economy and imports - incredible! The importance of Gazprom for the economy and budget is unprecedented!

Thus, without the factor of irregular payments from Gazprom, the budget deficit would have amounted to about 600 billion rubles per month.

Record dividends for the 1st half of the year for 51 rubles per share for 1.2 trillion rubles

In October 2022, Gazprom pays record dividends at 51.03 rubles. per share. The total amount of dividend payments will amount to 1 trillion 208.059 billion rubles. This is exactly 50% of the adjusted net profit of the Gazprom group for the first half of 2022.

Approval of an increase in the investment program to 1.98 trillion rubles

In October 2022, Gazprom's board of directors approved a record investment program. We are talking about an investment of 1.98 trillion rubles in 2022, which is 222 billion rubles more than originally called.

According to the company, the following will also grow:

• The volume of capital investments up to 1746.3 billion rubles, by 319.12 billion rubles;
• Expenses for the acquisition of non-current assets to 109.564 billion rubles, by 32.539 billion rubles.

The decision was due to the development of the Yamal, Yakutsk, Irkutsk gas production centers and the Power of Siberia pipeline. On October 17, 2022, Gazprom reported a decrease in fuel exports to non-CIS countries by 63 billion cubic meters - to 89.3 billion cubic meters. Since the beginning of 2022, this figure has decreased by 41.4%. During this time, gas production volumes decreased by 18% compared to the same period in 2021 - to 327.4 billion cubic meters.

The company also plans to increase the amount of financial borrowings in 2022 by 113.2 billion rubles to 386 billion rubles, and the adopted financial plan will provide coverage for the company's obligations without a deficit, in full.

{{quote "Taking into account the confident results of PJSC Gazprom in the first 6 months of 2022, we, nevertheless, continue to adhere to the principles of strict cost limits and balanced cash flows, - said the deputy chairman of the board of Gazprom Famil Sadygov, whose words are quoted in the release. }} According to Sadygov, the growth of the company's income makes it possible to compensate for the increase in the expenditure part of operating activities associated with the growth of tax payments on mineral extraction tax in the second half of 2022.

Ronald Smith, senior analyst at BCS World of Investments, notes that the adjustment of Gazprom's budget, which is carried out every year in September, in 9 out of 10 cases leads to an increase in costs.^[5]

Strong revenues from EU supplies despite 75% reduction in supply

Despite a sharp (about 75%) reduction in gas exports to Europe, by the end of May 2022, Gazprom still continues to earn at least 100 million euros per day on the EU.

2021

First place in the ranking of the largest Russian companies in terms of capital investments

In November 2022, Forbes magazine published a rating of the largest Russian companies in terms of capital investments for five years - 2017-2021. During this period, the rating companies invested a total of almost 42 trillion rubles. Read more here.

Record net profit - 2.68 trillion rubles

In 2021, Gazprom got rid of losses, registering a record net profit of 2.68 trillion rubles. In 2020, the company's net losses were measured at almost 707 billion rubles. The company's revenue on an annualized basis increased by 57.3% and reached 6.39 trillion rubles. Such data on Russian accounting standards were published in March 2022.

{{quote 'The main factor that influenced the financial result was the increase in gas and oil prices. The consequence of this was an increase in sales revenue, as well as an increase in spending on purchased gas and oil, - said in a press release from Gazprom. }}

Net revenue from gas sales increased by 85% to 5.7 trillion rubles, and from the sale of oil and gas products - by 44% and amounted to 2.6 trillion rubles. The growth in revenues from the sale of oil and gas products in the company is also explained by the increase in average prices "in all geographical segments."

Gazprom's net debt at the end of 2021 decreased by 26%, or 1 trillion rubles, compared to the beginning of the year, to 2.9 trillion rubles.

The main reason for the significant growth in revenue and profit is record high gas prices in Europe, Ronald Smith, senior analyst at BCS Global Markets, told Vedomosti. Aleksey Grivach, deputy general director of the National Energy Security Fund, agrees with him. Gas prices in Europe in 2021 on average increased by about 2 times compared to 2020, he recalls. The company's management policy to curb the growth of the group's operating expenses also played a role, the expert said. They are up just 35%, while sales revenue is up more than 60%, he says.

According to the deputy chairman of the board of Gazprom, Famil Sadygov, the average price of export supplies for the entire 2021 increased to $298 per 1,000 cubic meters (2 times higher than a year earlier).^[6]

2020

Decrease in revenue by 14.7% to 4.06 trillion rubles, losses under RAS - 706.9 billion rubles

Gazprom's revenue in 2020 reached 4.06 trillion rubles, which is 14.7% less than a year earlier. Gas sales during this time decreased from 3.31 trillion to 2.64 trillion rubles. The company also earned at the end of 2020:

• 801.61 billion rubles for the provision of property for rent (in 2019 - 779.7 billion rubles);
• 258.92 billion rubles for the sale of oil and gas products (in 2019 - 290.06 billion rubles);
• 243.64 billion rubles for the provision of services for organizing gas transportation (in 2019 - 241.3 billion rubles);
• 100.93 billion rubles for the sale of gas condensate (in 2019 - 123.17 billion rubles);
• 4.1 billion rubles for the provision of services for organizing gas storage (in 2019 - 1.92 billion rubles).

Gazprom registered its first loss since 1998 - in 2020 it reached 706.9 billion rubles. The company also restated its 2019 financial result. Initially, Gazprom's profit was estimated at 651.1 billion rubles, in a new report it grew to 733.9 billion rubles. The company explained the recount by a decrease of 81 billion rubles in the amount of deferred income tax.

The main reason for the losses in 2020 was a decrease in the market value of Gazprom Neft shares by 466.34 billion rubles - Gazprom since this year takes into account the change in the quotations of its packages in the reporting under RAS. However, even without taking this revaluation into account, the company's loss remains significant and is associated with a drop in both gas export volumes and prices due to the COVID-19 coronavirus pandemic.

According to IFRS, at the end of 2020, Gazprom's profit decreased by 88.7% compared to the previous year. Such data are presented in the consolidated annual report of the corporation under IFRS standards. If in 2019 the profit amounted to more than 1.2 trillion rubles, then in 2020 - only 135.3 billion rubles.

Gazprom's accounts receivable by the end of December 2020 amounted to 2.174 trillion rubles against 1.877 trillion rubles a year earlier. Accounts payable decreased to 852.768 billion rubles from 908.361 billion rubles at the end of 2019, indicated in the company's statements.

Gazprom 2020 Accounts

Debt growth by 16% to 3.68 trillion rubles

Gazprom's net debt for the first half of 2020 grew by 16% and as of June 30 amounted to 3.68 trillion rubles.

First quarterly loss in the company's history

Gazprom received 306 billion rubles of loss for the first quarter of 2020. The company became unprofitable under RAS for the first time in its history.

The company closed the first quarter with a loss of 116.2 billion rubles at. IFRS

Gazprom's exports in Q1 2020 decreased by 19.2% YoY.

2019

Payment of 360 billion rubles of dividends for the year to 15.24 rubles per share

Gazprom shareholders, including the Russian Federation, will receive close to record dividends from the company before their possible significant decline or even pause caused by the collapse of world markets amid the COVID-19 coronavirus pandemic.

Shareholders of PJSC Gazprom at the first annual meeting in the history of the corporation approved the payment of dividends for 2019 in the amount of 15.24 rubles per share, the company reports.

The total amount of dividends will amount to 360.784 billion rubles, including the state directly to the Rosimushchestvo package (38.373%) will receive 138.445 billion rubles, another 42.784 billion rubles will be received by the holders of the controlling state-owned stake - Rosneftegaz JSC and Rosgazification JSC.

Revenue reduction by 6.8% to RUB 7.65 trillion

Mega-structures for the construction of pipelines to China, Turkey and bypassing Ukraine, along with a drop in gas prices in Europe, dealt a heavy blow to Gazprom's budget.

The gas holding, which has the monopoly right to export Russian pipeline gas, ended 2019 with a record "hole" in cash flows in its history.

Having lost 6.8% of revenue (it decreased from 8.224 to 7.659 trillion rubles) and faced with a drop in sales both in Europe ( by 1.2%) and in Russia (by 1.5%), Gazprom reported a 17% drop in net profit to 1.269 trillion rubles.

At the same time, the company became unprofitable in terms of cash flow in its accounts. Having received 1.709 trillion rubles from operating activities, Gazprom spent 1.938 trillion on investments, including capital construction and issuing loans to subsidiaries.

Among the 20 most profitable companies in the world

1997: The company provides 20% of the total Russian budget

Before the 1998 crisis, it was reported that Gazprom provided 20% of the entire Russian budget^[7]

Notes