Gazprom Group, Russia’s state-controlled gas giant, reported its first annual net loss since 1999, amounting to 629 billion rubles ($6.84 billion) in 2023.
The loss is attributed to falling shipments to Europe and lower fuel prices, a stark contrast to the net income of 1.23 trillion rubles in 2022. The company’s shares fell by up to 4.4%, raising concerns over dividend prospects, particularly for the Russian government, which is Gazprom’s biggest shareholder.
The loss also follows restricted gas flows to Europe, historically Gazprom’s biggest market, as a result of the Kremlin’s retaliation for Western support of Ukraine after Russia’s invasion in 2022. Plunging gas prices due to mild weather, sluggish demand, and high inventories also contributed.
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Revenue from gas fell by 40% to 4.88 trillion rubles, with flows to Europe reaching their lowest levels since the early 1970s.
Russia expects its gas shipments via pipelines to foreign markets to increase by 18% to 108 billion cubic meters in 2024 compared to 2023, as the Power of Siberia link to China gradually reaches capacity. But even that won’t cover the loss of the European market.
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