Gazprom Books Massive Losses for 2020 on Falling Energy Prices and Ruble Depreciation

Russian energy major Gazprom has seen a dramatic fall in net profits for the first nine months of 2020, which fell to 218 billion rubles ($2.9 billion) from nearly 1.1 trillion rubles ($14.5 billion) a year ago, RT reported.

In its report published on Monday, Gazprom said that overall net sales of gas dropped by third for the three quarters year-on-year. The company explained that it was caused by a drop in average prices and volumes of gas sold. The steepest decline was recorded in “Europe and other countries” segment, with sales of blue fuel plummeting by 40 percent.

According to Gazprom, the average exporting price per 1,000 cubic meters of gas declined to $117 in July-September. For the first three quarters, the price fell to nearly $129 per 1,000 cubic meters from $215 seen in 2020.

Apart from the falling sales, the company has also suffered losses due to the devaluation of the Russian ruble. The energy major said that the exchange rate “had a major impact” on its financial results, with its net foreign currency-related loss reaching almost 750 million rubles for the nine months through September.

“This change was mainly due to the revaluation of accounts receivable from foreign customers and loans issued, which was caused by the appreciation of the US dollar and the euro against the Russian ruble by 29 percent and 34 percent, respectively,” Gazprom said.

The company is still optimistic about gas exports to its key markets. Gazprom raised its forecast for gas supplies to Europe and Turkey in 2020 to around 171-172 billion cubic meters (bcm), up from a previous forecast of 170bcm, Reuters reported, citing a senior manager.