Russian gas giant Gazprom announced Tuesday its second-quarter net income dropped by more than 80 percent year-on-year to 48 billion roubles ($817.3 million) due to losses related to foreign exchange rates, missing analyst forecasts.
Analysts polled by Reuters had expected the second-quarter earnings at 50.2 billion roubles.
April-June sales rose to 1.39 trillion roubles, up from 1.33 trillion roubles a year ago, the company said.
Gazprom said net foreign exchange loss reached about 140 billion roubles in the second quarter compared to a profit of more than 150 billion roubles a year ago.
The losses were related to the revaluation of Gazprom’s debt, denominated in foreign exchange and reflecting the rouble’s volatility.
Net debt jumped by 19 percent in the first six months of the year, to stand at 2.29 trillion roubles as of June 30 2017.
Gazprom’s gas sales outside of the ex-Soviet Union, mainly to the European Union, rose to 119.1 billion cubic metres (bcm) in the first half of the year from 109.4 bcm in the same period a year ago.
But the average gas price in Europe, including customs fee, fell to 11,117 roubles per 1,000 cubic metres in the first six months of the year from 12,798 roubles in January-June 2016 due to the rouble appreciation.
The Kremlin-controlled energy champion, which supplies about a third of EU
needs, reports its financials in roubles.
The decline in prices also showed the firm had to be more flexible in dealing with customers amid growing competition from other energy sources, including liquefied natural gas (LNG) and suppliers such as Norway.