Gazprom reported record losses due to supply stops in Europe

The Russian gas monopolist Gazprom reported its first losses in 25 years under international financial reporting standards. In 2023, the corporation lost 629 billion rubles (approx. $6.8 billion). The reason was a sharp reduction in supplies to Europe.

On May 2, Gazprom published reporting of its group of companies for 2023. Revenue decreased by 27 percent year-on-year, mainly due to the gas business (-43 percent). Oil sales in the domestic and foreign markets exceeded gas sales for the first time.

At the same time, the company practically failed to reduce costs, and their capital portion increased by almost 10 percent. In addition, in Russia the corporation had to pay more taxes due to their increase.

By calculations Kommersant newspaper, in 2023 the corporation reduced pipeline exports to Europe by more than 2.5 times, to 24 billion cubic meters, against 62 billion in 2022. Deliveries are carried out through Ukraine and Turkey. Sales to China were unable to compensate.

The corporation’s losses were significantly higher than analysts’ expectations, should from material from RBC Investments. The volume of profit before taxes (EBITDA) was also significantly lower than expected.

Gazprom’s reporting also contradicts the Kremlin’s statements about its condition. In October 2023 in speech At the Russian Energy Week forum, Russian President Vladimir Putin said that the corporation “feels confident, calm, and is coping,” despite the decline in supplies and revenues.