Gazprom first half profits drop 34% to $16.2 bn
Operating expenses rose 8% to $51.8 billion largely due to increased taxes and transit charges
Moscow: The world’s largest gas company Gazprom on Friday announced a 34% drop in net profits for the first half of 2012 to $16.2 billion as sales in its core markets dropped and expenses increased.
Gazprom said in a statement that its net profit for the first half was 508.7 billion rubles ($16.2 billion) compared with 771.7 billion rubles ($26.6 billion) in the same period last year, with total sales falling 5% to 2.23 trillion rubles ($71.1 billion).
Income was squeezed by a 15% fall in net sales of gas to 1.24 trillion rubles ($39.7 billion) although a 10% drop in sales to European markets was partially compensated by currency factors.
Sales of gas to the former Soviet Union region, however, plunged by a sharp 23%, the company said.
Operating expenses meanwhile rose 8% to 1.62 trillion rubles ($51.8 billion) largely due to increased taxes and transit charges, the company said.
Founded in 1989, Gazprom grew out of the USSR’s gas industry ministry to become the world’s largest gas company and a pillar of the modern Russian state under President Vladimir Putin which is still hugely reliant on petrodollars.
However, analysts have said its long-term domination is at risk as European clients seek to diversify import sources and as alternative gas sources like shale and LNG where Gazprom has failed to make an impact become more significant.
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