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Gazprom in profit surge

August 10, 2015

Russia's state-controlled energy giant Gazprom has reported a huge rise in quarterly profit, despite a volatile business environment and international sanctions. A weak ruble sent earnings soaring.

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Gazprom worker
Image: Reuters

Gazprom announced Monday it logged a staggering 71-percent surge in bottom-line earnings in the first quarter year-on-year.

Net profit at the company totaled 382 billion rubles ($5.9 billion, 5.5 billion euros) in the three months under review.

Gazprom acknowledged that the result was in no small way attributable to the "increase in average prices in ruble terms."

By pricing its gas in dollars, sales packed a much bigger punch when converted into the much weaker Russian currency.

Lower output

The ruble lost about half of its value as Western sanctions over the Kremlin's perceived role in the Ukraine conflict kept biting. A recent slump in energy prices saw the ruble hit its lowest level against the greenback since February this year.

Gazprom said its sales volume in the first quarter was down by about 10 percent to 132.3 billion cubic meters of gas. However, this drop was offset by contractually set gas prices that were considerably more favorable than those on the open market.

Russia's Economy Ministry had warned it expected the company's production to drop to 414 billion cubic meters for the whole of 2015 which would mark an all-time low.

hg/pad (AFP, dpa)