Gazprom, Russia’s largest gas producer, posted a loss of 53 billion roubles ($492.5 million) for the third quarter of 2024, driven primarily by an expected 20% increase in the profit tax rate for 2025. This marks a stark contrast to the 56.4 billion roubles ($529 million) profit the company recorded in the same period last year. Despite this quarterly setback, Gazprom reported a significant rise in its nine-month net income, reaching 990 billion roubles, up from 353 billion roubles in 2023. The positive performance is attributed to higher gas prices, increased supplies, and strong oil sales, as well as the successful integration of its stake in Sakhalin Energy, a Russian liquefied natural gas (LNG) producer.
In March 2024, Gazprom acquired a 27.5% stake in Sakhalin Energy from Shell for around $1 billion, which boosted its overall earnings. Additionally, its earnings before interest, taxes, depreciation, and amortization (EBITDA) for the first nine months of 2024 rose by 23% year-on-year to 2.14 trillion roubles, one of the highest figures in the company’s history. Gazprom also reported a dividend payout basis of 842 billion roubles as of the end of September, though it had not paid dividends for 2023 following its first annual loss since 1999.
However, Gazprom continues to face challenges, notably a sharp decline in gas sales to Europe, historically its main source of revenue. The political fallout from the war in Ukraine and the cessation of transit gas flows via Ukraine after December 31, 2024, are expected to further hurt sales. Ukraine has made it clear it will not negotiate a new agreement with Russia regarding gas transit, which could significantly affect Gazprom’s future earnings from European markets.
As Gazprom navigates these hurdles, the company remains focused on its diversification strategies and increasing domestic and Asian market sales, but the future of its European business remains uncertain.
