Gazprom Net Profit Triples On Cold Weather
02.09.10, 12:42 Uhr
MOSCOW -(Dow Jones)- Russia's OAO Gazprom (GAZP.RS), the world's largest
producer of natural gas, Thursday posted a more than threefold increase
in first-quarter net profit and said net debt decreased by almost a
third.
Net profit attributable to Gazprom owners for the first three
months of the year rose to RUB324.95 billion rubles ($10.55 billion),
compared with RUB103.68 billion during the same period a year earlier.
The increase was driven by a pickup in volumes due to cold weather in Europe--its major export market--and higher domestic profits. Net profit was above the RUB300 billion average of eight analysts polled by Dow Jones Newswires.
"We believe the results should alleviate some of the market's existing concerns over the sustainability and profitability of Gazprom's exports into Europe," said Alexander Burgansky, analyst at Renaissance Capital.
Gazprom also said it decreased net debt by 29% in the three months to RUB977.27 billion.
Sales in the period rose 14% to RUB956.82 billion, from RUB837.16 billion a year earlier, as demand for the company's gas grew due to cold weather in Europe and in Russia. Analysts had expected first-quarter sales of RUB915 billion.
Generated free cash flow in the first quarter totaled RUB233.1 billion, compared with a negative free cash flow a year earlier.
"While the main reason for strong cash flow generation were one-offs, we still think that strong cash flow results are likely to present a positive surprise to investors," said ING analyst Igor Kurinnyy.
Operating profit totaled RUB339.30 billion in the first quarter, up from RUB282.59 billion a year earlier.
Gazprom supplies around a quarter of Europe's gas needs, though its market share dropped last year due to the inflow of alternative energy sources.
The increase was driven by a pickup in volumes due to cold weather in Europe--its major export market--and higher domestic profits. Net profit was above the RUB300 billion average of eight analysts polled by Dow Jones Newswires.
"We believe the results should alleviate some of the market's existing concerns over the sustainability and profitability of Gazprom's exports into Europe," said Alexander Burgansky, analyst at Renaissance Capital.
Gazprom also said it decreased net debt by 29% in the three months to RUB977.27 billion.
Sales in the period rose 14% to RUB956.82 billion, from RUB837.16 billion a year earlier, as demand for the company's gas grew due to cold weather in Europe and in Russia. Analysts had expected first-quarter sales of RUB915 billion.
Generated free cash flow in the first quarter totaled RUB233.1 billion, compared with a negative free cash flow a year earlier.
"While the main reason for strong cash flow generation were one-offs, we still think that strong cash flow results are likely to present a positive surprise to investors," said ING analyst Igor Kurinnyy.
Operating profit totaled RUB339.30 billion in the first quarter, up from RUB282.59 billion a year earlier.
Gazprom supplies around a quarter of Europe's gas needs, though its market share dropped last year due to the inflow of alternative energy sources.
The company's stock has lost almost a fifth of its value this year.
DJG/mrf
