Gazprom’s share worth fell after the choice to not pay dividends

Gazprom’s share worth fell by nearly 6% to 145.03 rubles (1.47 euros), which is the bottom worth since October 2023. The worth of Gazprom fell by 144 billion rubles (1.46 billion euros) in simply an hour after the Russian authorities, Gazprom’s largest shareholder, determined to arrange a directive to refuse to pay dividends.

Based on its annual report, Gazprom suffered a lack of 629 billion rubles (6.4 billion euros) final yr, the most important loss within the firm’s historical past. The earlier yr when Gazprom operated at a loss was 1999. In 2022, the corporate earned a revenue of 1.23 trillion rubles, which was already 41% lower than within the earlier yr.

Sanctions imposed by Western nations on Russia for its all-out struggle in Ukraine have severely impacted Gazprom as the corporate not has entry to most European markets. Gazprom is looking for new export prospects, however constructing new infrastructure is dear and might take a number of years.

After the lack of European markets, Gazprom’s exports fell to the 1985 degree (69 billion cubic meters), and decreased thrice in comparison with the pre-war degree. Unable to promote fuel, Gazprom was compelled to freeze wells and misplaced 1 / 4 of its manufacturing in two years. The amount of fuel manufacturing final yr was the bottom within the historical past of Gazprom.

Having misplaced the fuel struggle with Europe, Russian President Vladimir Putin is counting on China, providing it to construct, along with the Energy of Siberia pipeline, one other one – the Energy of Siberia-2 pipeline with a capability of fifty billion cubic meters.

Putin, nevertheless, failed to realize Chinese language consent, regardless of assurances of “friendship” and a “strategic” partnership “with out borders.” Putin’s state go to to China final week additionally didn’t change the state of affairs, as Putin didn’t attain a brand new contract and Chinese language President Xi Jinping didn’t point out Russian fuel in his official statements.

Even when Gazprom manages to achieve an settlement with China on a brand new pipeline, this can solely worsen the corporate’s monetary place, in line with MMI analysts. Beijing doesn’t wish to make investments on this venture and affords Russia to independently pay for the development of the Energy of Siberia-2 fuel pipeline with a size of three,550 kilometers.

Analysts warn that Gazprom will not pay dividends “for a few years” as a result of the corporate does not have sufficient working money circulate to cowl funding prices and its debt load is rising. Gazprom’s debt, not lined by money reserves, reached 5.2 trillion rubles (52.8 billion euros).

Gazprom owns 34% of the shares of JSC Latvijas gāze.