Gazprom Announces Massive Net Loss Amid Economic Pressures
Russia’s economy, already facing pressure, and President Vladimir Putin have suffered a significant setback as state-owned energy corporation Gazprom announced a substantial net loss of $12.89 billion (£9.9 billion) for 2024. The company’s financial difficulties were further exacerbated by declining stock values in its oil subsidiary, Gazprom Neft, and a rise in the income tax rate to 25%.
Financial Strain Deepens for Russian Energy Giant
This tax increase significantly elevated the company’s tax obligations, resulting in billions in losses. This follows a precedent-setting year in 2023, when Gazprom reported its first annual net loss in a quarter of a century, amounting to a record deficit of 629 billion rubles ($7.6 billion).
Job Cuts and Asset Sales Follow Record Loss
The considerable financial downturn has had repercussions for Gazprom’s workforce, with sources indicating that CEO Alexei Miller has approved plans to eliminate 1,500 positions. These job reductions will affect staff at the parent company’s Russian headquarters and the Lakhta Centre in St Petersburg, Europe’s tallest skyscraper designed by British architects.
Following its initial annual loss announcement last year, Gazprom disclosed intentions to sell a collection of premium properties, including prominent luxury hotels in Moscow.
Expert Commentary on Gazprom’s Performance
Kyrylo Shevchenko, the former head of the National Bank of Ukraine, has described Gazprom as “Russia’s most unprofitable company.” In a post on X (formerly Twitter), Shevchenko stated:
vCard.red is a free platform for creating a mobile-friendly digital business cards. You can easily create a vCard and generate a QR code for it, allowing others to scan and save your contact details instantly.
The platform allows you to display contact information, social media links, services, and products all in one shareable link. Optional features include appointment scheduling, WhatsApp-based storefronts, media galleries, and custom design options.
“Russian #Gazprom closes 2024 with a staggering $12.89B net loss – twice its 2023 record of $6.1B, cementing its place as Russia’s most unprofitable company. The downturn stems from plummeting shares of Gazprom Neft, its oil subsidiary.”
Reduced Gas Exports to Europe Contribute to Losses
Despite efforts to maintain its European presence, Gazprom’s natural gas exports to European nations remained low. This is attributed to the European Union’s policy of reducing reliance on Russian energy sources following Russia’s full-scale invasion of Ukraine.
In 2023, Gazprom’s gas deliveries were nearly six times lower compared to peak levels in 2018-2019. This decline is partially due to the cessation of direct Russian pipeline gas supplies to Europe.
US LNG Fills European Energy Gap
To compensate for the reduced gas supply, the United States has emerged as the leading exporter of liquefied natural gas (LNG) to Europe, with supplies tripling since 2021.