Gazprom profits more than triple in Q2 on price spike
Russia's national gas company Gazprom saw its net profits in the second quarter more than triple year on year to 521bn rubles ($7bn), amid a strong rebound in European gas prices from coronavirus lows.
Gazprom benefited from a recovery in gas demand in Europe, supported by stronger economic activity, increased storage injections and a heat wave. Its sales nearly doubled to 2.07 trillion rubles, thanks largely to an increase in realised gas sales in Europe to $224.4/'000 m3, from just $110.1 a year earlier. It also expanded supplies to the continent to 56.1bn m3 in the three-month period, from 46.6bn m3 in Q2 2020.
The company also enjoyed a surge in sales of refined products to 643bn rubles, from 348bn rubles a year earlier, and benefited from higher prices and increased gas sales volumes in Russia and other ex-Soviet states.
Gazprom's net income came in at 10% above the forecast of Sova Capital, the Moscow-based brokerage told NGW, even though its revenues fell 2% short of the expectation. The company said it expected to spend 1.8 trillion rubles in investment this year.
The company will gain from even higher wholesale gas prices in Europe in the third quarter. In late July, September futures at the Dutch TTF hub surpassed $500/'000 m3, marking the higher price in three and a half years. But Gazprom will also take a hit to its earnings as a result of a fire that broke out in early August at its Urengoi gas condensate treatment plant, which has knocked out some of its capacity.
Gazprom is due to hold a conference call today at 17:00 Moscow time.