Gazprom reported a net loss of nearly 7 billion USD last year due to a decline in its gas business with Europe. The company released its financial report for 2023 on May 2, revealing negative business indicators after a volatile year. Total revenue for Gazprom in the previous year was 8,500 billion rubles, down from 11,700 billion rubles in 2022, with gas revenue decreasing by 40% to 4,880 billion rubles. This resulted in a net loss of 629 billion rubles (6.9 billion USD), contrary to previous analyst predictions of a net profit of 447 billion rubles.
This marked the first time Gazprom had experienced a loss since the late 90s, occurring as a result of decreased gas business activities with Europe, which had previously been the company’s main market. Although overall revenues declined, some segments of the company experienced growth, such as revenue from the oil segment increasing by 6.7% and electricity by 8.8%.
Russia had planned to tighten gas supplies to Europe from mid-2022 as retaliation for Western support of Ukraine in the war. Factors such as decreased demand, mild weather, and increased reserves also contributed to the decrease in gas prices affecting the company. Gazprom’s shares closed more than 4% down on the Moscow stock exchange following the release of the financial report.
Despite the challenges faced, Gazprom continues to supply pipeline gas to Western countries, although the amount of fuel supplied has dropped to its lowest level in 50 years. Gazprom plans to invest 2,570 billion rubles this year, a decrease of 16% compared to the previous year’s plan. The company forecasts an 18% increase in pipeline gas exports to 108 billion cubic meters this year, driven by increased gas flow through the Power of Siberia pipeline to China.