Gazprom Sees Fall In Profits

Russian energy giant Gazprom has today announced a fall in profits of up to 20% over its second financial quarter, as a result of falling demand with an improved climate within its key European marketplace and growing expenses offsetting results from previous periods.

The gas giant reported a fall in its net profit figures over the period of £2.3 billion as a result of warmer weather across Europe, which meant consumers required less gas for heating purposes and consequently depressed revenues, whilst operating expenses disproportionately increased to hinder profitability.

Revenues for the period were down in some of the group’s major territories, including Italy, Poland, France and Slovakia which all reporting falling sales of gas over the warmer months, which had an overall impact on the profitability of the group.

Nevertheless revenues overall for the group, which supplies a quarter of European energy, were up 5%, reaching over 530 billion roubles, whilst expenses shot up much more significantly by around 18%, thus reflecting a decrease in profitability as compared with the year previous.

The announcement comes at a time of great anxiety about Gazprom and its market share in the European and Central Asian energy markets, particularly amidst scenes like the stand offs in Ukraine that lead to blackouts and supply shortages to leverage price increases and aggressive tactics in relation to expansion.

Meanwhile Gazprom continue to strengthen their hold on the European energy market, with expectations of a much disputed 38% price rise in Ukraine just days away, ending the custom of discounted rates for former Soviet nations.

Gazprom currently supplies gas to 25% of Europe, of which the vast majority of supplies were passed through the Ukraine before entering in eastern Europe.

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