The state-owned company reported record profits for the first nine months of 2021 on the back of soaring gas prices. Gazprom expects to boost performance even further in the last quarter of the year. Its shares gained 2% to Rbs332 on Monday.
Gazprom’s deputy chair Famil Sadygov commented on the company’s results. He said on Monday that earnings of Rbs1.55 trillion ($20 billion) in the nine months to the end of September were already higher than in any full calendar year in Gazprom’s history.
The energy giant holds a monopoly on Russia’s pipeline gas exports. It benefited from a surge in gas prices in Europe, its main export market. Gazprom has been fulfilling its contract obligations but with no additional spot sales, helping sustain high prices caused by factors including redirected global gas supplies to Asia.
Gas prices reached phenomenal results. Notably, third-quarter prices nearly tripled year on year to $304 per 1,000 cubic meters according to Gazprom.
Gazprom and gas prices
Gazprom’s revenues from overall gas sales in the first nine months of the year rose 77% from the same period in 2020. Sales to Europe as well as Turkey jumped 117% to Rbs2.5 trillion.
Gas prices surged much higher since then, promising bumper earnings in the coming months. Moreover, European gas prices were on the march again on Monday as the cold snap gripped Europe.
Gas futures linked to Europe’s wholesale gas price TTF, rose 7.6% to €95.25 per megawatt hour. Gas futures reached a record of nearly €118 in October.
Besides, as temperatures fell over the weekend, analysts said the pace of withdrawals in Europe accelerated to 2.5bn cu m from 1.8bn cu m the week before.
According to analysts from UBS European gas storage utilization fell to 71% or 71 bcm as of November 24.
Morgan Stanley’s analysts said the company generated almost $8 billion of free cash flow in the first nine months.
The human rights group Global Witness released its report on Monday. The world’s biggest gas companies, most of which also produce oil, reported $65 billion in profits in the third quarter of the year.
The Russian state-owned company reported a record quarterly net profit of Rbs581.8 billion ($7.8 billion) for the third quarter. In the third quarter of 2020, Gazprom posted a loss of Rbs251 billion. Gazprom’s previous highest quarterly profit was almost Rbs536 billion in the first quarter of 2019.
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