Gazprom reports higher earnings despite Q3 slump

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The world's largest gas firm Gazprom reported a 40 percent rise in nine-month profits whose impact was muted by a sharp drop in third quarter earnings that were attributed to higher costs.

The Russian monopoly said in a statement that its net profits for the first nine months of 2010 had risen 39.5 percent to 668.75 billion rubles ($22.82 billion, 16.7 billion euros).

But profits attributed to the company's shareholders dropped to 159.0 billion rubles in the third quarter from 174.6 billion rubles in Q3 2009 -- an 8.9 percent decline that sent the stock down one percent in early trading.

The disappointing figure was reported only a day after Prime Minister Vladimir Putin told the company to ease private producers' access to its vast pipeline network in what analysts interpreted as another blow to Gazprom.

Gazprom's latest financial statements did not qualify the performance figures. But they came on the heels of a senior executive's confirmation that the company's exports fell about 1.5 percent last year.

The company's Thursday statements reported a jump in net nine-month profits from sales within Russia and to ex-Soviet republics but a drop in income from sales to Europe and other countries.

Gazprom said net profits from its sales to Europe and other countries outside the former Soviet Union had dropped by six percent between January and September due to a decline in ruble-denominated settlement prices.

The company stressed that the volume of actual sales to countries outside the former Soviet Union had increased by four percent.

Net profits from Russian sales jumped by 34 percent as the company continued to pursue its politically-sensitive policy of gradually lifting prices for domestic consumers to bring them closer in line with those seen in Europe.

Gazprom grew out of the Soviet Union's Gas Industry Ministry in 1989 and has since remained the country's biggest and most important company.

The company was partially privatised in 1993 in the much-criticised sale of state assets in post-Soviet Russia but the state retains a controlling stake of just over 50 percent.

Europe still receives about 25 percent of its gas from the Russian monopoly even as it seeks to diversify supply routes and rely more on liquefied natural gas from Qatar and north Africa.

Gazprom has responded by putting a greater focus on Asia and hopes to secure a major new contract with China by the middle of this year.

© 2011 AFP

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