Home Energy Gazprom reported loss for the first quarter 2020

Gazprom reported loss for the first quarter 2020

Gazprom issued its unaudited consolidated interim condensed financial information prepared in accordance with International Accounting Standard 34 Interim Financial Reporting (IAS 34) showing a net loss of 116.2 billion Russian roubles ($1.6 billion) in the January-March period. This compares to a profit of 535.9 billion roubles in the same quarter last year.

Sales (net of excise tax, VAT and customs duties) decreased by RUB 551,989 million, or 24 %, to RUB 1,739,832 million for the three months ended March 31, 2020 compared to the same period of the prior year. The decrease in sales was mainly due to a decrease in sales of gas to Europe and other countries.

Net sales of gas decreased by RUB 438,217 million, or 34 %, to RUB 865,606 million for the three months ended March 31, 2020 compared to the same period of the prior year. The change was mainly due to a decrease in average prices and volumes of gas sold in the “Europe and other countries” segment.

Net sales of gas to Europe and other countries decreased by RUB 377,912 million, or 45 %, to RUB 459,484 million for the three months ended March 31, 2020 compared to the same period of the prior year. The change was mainly due to the decrease in average prices (including excise tax and customs duties) denominated in the Russian Ruble by 36 % and the decrease in volumes of gas sold by 17 %, or 10.8 bcm. At the same time average prices denominated in US Dollar decreased by 37 %.

Net sales of gas to Former Soviet Union countries decreased by RUB 30,378 million, or 26 %, to RUB 87,119 million for the three months ended March 31, 2020 compared to the same period of the prior year. The change was mainly due to the decrease in volumes of gas sold by 24 %, or 2.9 bcm, and the decrease in average prices (including customs duties) denominated in the Russian Ruble by 12 %. At the same time average prices denominated in US Dollar decreased by 13 %.

Net sales of gas in the Russian Federation decreased by RUB 26,165 million, or 7 %, to RUB 322,765 million for the three months ended March 31, 2020 compared to the same period of the prior year. This change was explained by the decrease in volumes of gas sold by 8 %, which was partially compensated by the increase in average prices in the Russian Ruble (net of VAT) by 1 %.

Net sales of crude oil and gas condensate (net of VAT and customs duties) decreased by RUB 69,528 million, or 37 %, to RUB 120,861 million for the three months ended March 31, 2020 compared to the same period of the prior year. The change was mainly due to a decrease in net sales of crude oil primarily caused by a decrease in average prices of crude oil.

Operating expenses decreased by RUB 342,515 million to RUB 1,439,701 million for the three months ended March 31, 2020 compared to the same period of the prior year.

The decrease in operating expenses was mainly caused by the change in the item “Foreign exchange differences on operating items”. Foreign exchange gain on operating items amounted to RUB 115,584 million for the three months ended March 31, 2020 compared to the foreign exchange loss in the amount of RUB 47,251 million for the same period of the prior year. The change was mainly due to the revaluation of accounts receivable from foreign customers and loans issued.

The decrease in the item “Purchased gas and oil” by RUB 124,746 million, or 31 %, for the three months ended March 31, 2020 compared to the same period of the prior year was caused by a decrease in average prices of gas and oil and a decrease in volumes of purchased gas and crude oil.

The balance of foreign exchange differences reflected within the item “Net finance (expense) income” produced the loss in the amount of RUB 551,396 million for the three months ended March 31, 2020 compared to the gain in the amount of RUB 183,985 million for the same period of the prior year.

Loss attributable to the owners of PJSC Gazprom amounted to RUB 116,249 million for the three months ended March 31, 2020 compared to profit in the amount of RUB 535,908 million for the same period of the prior year.

Net debt balance (defined as the sum of short-term borrowings, current portion of long-term borrowings, short-term promissory notes payable, long-term borrowings, long-term promissory notes payable, net of cash and cash equivalents) increased by RUB 571,766 million, or 18 %, from RUB 3,167,847 million as of December 31, 2019 to RUB 3,739,613 million as of March 31, 2020. This change was mainly due to an increase in the amount of long-term borrowings denominated in the Russian Ruble caused by the appreciation of US Dollar and Euro against the Russian Ruble.