• Natural Gas News

    Gazprom decides against dividend for first time since 1998

Summary

The announcement triggered a slump in the company's share price.

by: NGW

Posted in:

Complimentary, NGW News Alert, Natural Gas & LNG News, Europe, Top Stories, Corporate, Investments, Financials, News By Country, Russia

Gazprom decides against dividend for first time since 1998

Russia's Gazprom announced on June 30 it had decided against paying dividends on its income last year, marking the first time since 1998 it has not rewarded shareholders with a payout since 1998.

The company, whose main shareholder is the Russian state, earned a record 2.09 trillion rubles ($29bn) in net profit in 2021, on the back of soaring gas prices in Europe. The company said earlier this year it intended to pay 1.244 trillion rubles in dividends for 2021.

"The shareholders decided that in the current situation it is not advisable to pay dividends based on the 2021 results," deputy CEO Famil Sadygov said in a message on Gazprom's Telegram channel.

Gazprom will instead focus on Russian regional gasification, preparations for the heating season and paying increased taxation, Sadygov said. The company has pledged to invest some 526bn rubles by 2025 in expanding the percent of Russians with access to gas supply from the current 72%. Meanwhile, Russian lawmakers on June 30 backed a draft bill to raise Gazprom's mineral extraction tax bill by 416bn rubles this year.

The announcement triggered a 27% slump in Gazprom's share price, but also led to the ruble strengthening further, as foreign investors in Gazprom typically convert their ruble-denominated dividends into other currencies.