Russian giant Gazprom on Monday announced a deep dive into the red, recording net losses reflecting the global crisis triggered by the coronavirus pandemic, which has resulted in lower demand and depressed gas prices.
Between July and September, the group recorded net losses of 247.7 billion rubles (2.7 billion euros at the current rate), against an already disappointing net profit of 228 billion rubles over the same period in 2019.
Hydrocarbon producers around the world have been hit hard by the collapse in energy demand and prices, due to measures taken to combat the novel coronavirus pandemic, affecting the transport sector in particular.
In Russia, corporate results are also affected by a devaluation of the ruble, which has lost about a third of its value since the start of the year.
In a terse note, the group clarified that the quarter’s results were due to a simultaneous decline in gas prices, gas demand and the value of the ruble against Western currencies.
The first half of the year had already seen Gazprom’s net profit plummet, divided by 25 over one year to 32.9 billion rubles, with losses in the first quarter, followed by a recovery and a return to green in the second trimester. The giant was hoping for improvement in the third quarter.
Gazprom says revenues from gas sales to Europe and Turkey – which have always provided the bulk of profits for the heir to the Soviet Gas Ministry – fell 40% from January to September 2020 compared to at the same period in 2019,
“This development is due to the drop in average prices” for gas by more than a third as well as to “the 10% drop in the volume of gas sold” over one year.
Gazprom recorded in 2019 a drop of 17%, to 1,203 billion rubles, in its net profit compared to 2018, the year of all records.