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Gazprom profits tumble

Chris CottrellOctober 14, 2014

Strife with Ukraine and the European Union has dragged down profits for Russia's state-controlled gas giant, Gazprom. The company cited weaker sales in the European Union and a gas dispute with Ukraine.

https://p.dw.com/p/1DVbi
Gazprom building in Moscow
Image: picture-alliance/dpa

Gazprom said Tuesday its year-on-year profits in the first half of 2014 tumbled by nearly a quarter due to a protracted dispute with Ukraine over the cost of natural gas.

Profits in the first six months of the year fell to 450.58 billion rubles (8.7 billion euros, $11 billion), down from 583 billion rubles last year - a 22.7 percent decrease - despite a 13 percent rise in net profit from April to June, the Russian gas giant said.

Sales revenue had risen to 1.3 trillion rubles in the second quarter, but it was not enough to offset $4 billion in debt the company said it was owed by Kyiv.

Gazprom has been locked in a bitter disagreement with Ukraine's western-leaning government ever since protesters in Kyiv ousted Kremlin-backed President Viktor Yanukovych in February.

In response, state-controlled Gazprom nearly doubled the price of gas for the now embattled country. When the government in Kyiv refused to pay the inflated price, Moscow cut off supplies and now says it is owed billions of dollars in unpaid arrears.

The two sides are expected to meet in Berlin on Oct. 21 with outgoing European Energy Commissioner Günther Oettinger to negotiate an end to the standoff.

cjc/uhe (AFP, dpa)