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Monday, May 20, 2024

Gazprom. The Russian giant is reeling. “Huge rockfall”

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Gazprom announced that in 2023 it recorded its first annual loss in over 20 years – at the level of $6.9 billion. The gas giant suffered a sharp decline in sales to Europe, which sharply limited gas imports following Russia's attack on Ukraine.

As CNN notes, we are dealing with a “huge decline” in the results of Gazprom, one of the most powerful companies in Russia. Gazprom announced that it ended 2023 with a loss of $6.9 billion.

Analysts expected net income of $4.9 billion in 2023, according to the Interfax news agency. In 2022, the year Russia launched its full-scale invasion of Ukraine, the company posted a net profit of $13.1 billion.

Consequences of the war in Ukraine

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According to a Reuters analysis, it was Gazprom's first annual loss since the late 1990s, around the time Alexei Miller, President Vladimir Putin's man, took control of the company in 2001.

At that time, Gazprom was struggling due to its significant debt in foreign currencies, which had increased as a result of the sharp weakening of the ruble as a result of the 1998 financial crisis.

A decline in gas exports to Europe

Russian gas exports to Europe, once the main foreign market for Gazprom, have decreased significantly as a result of sanctions imposed on Moscow after its aggression against Kiev.

According to Reuters calculations, natural gas supplies to Europe fell by 55.6% last year, to 28.3 billion cubic meters.

Since the beginning of 2023, Gazprom has not published its own export statistics.

Reuters reported that the company's underlying earnings, or before interest, taxes, depreciation and amortization, known as EBITDA, fell to $6.7 billion last year from $30.4 billion in 2022. “EBITDA was the worst in 22 years,” said Ronald Smith of the Moscow-based brokerage house BCS Global Markets.

Main photo source: Konstantin Lenkov / Shutterstock.com



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