Cash flow of Gazprom has fallen to zero


According to CFO of Gazprom Andrei Kruglov, financial results of the company by the results of 2016 will be worse than expected.

Because of the sharp fall in gas prices and rising costs, the company completes the year with zero free cash flow. This indicator reflects the difference between the inflow of funds and their outflow. In the first half of the year this difference was positive and amounted to $2.7 billion.

In the period from July to December all the accumulated cash was spent. Moreover, if we take into account payment of dividends, then at the second half of the year Gazprom spent $5.5 billion more than it earned.

Also, the fall of EBITDA this year will be 30%, instead of 15-20% that were expected in mid-year, said Kruglov.

The production volumes will fall to its lowest level for the whole post-Soviet period. The new forecast is 408.9 billion cubic meters. This is 2% lower than last year, and 9% lower than the original plan, which was 452 billion cubic meters.

Gazprom’s net profit for 9 months decreased 2.3 times, to 75.417 billion rubles ($1.2 billion – RRT), sales profit decreased 2.8 times and amounted to 192.664 billion rubles ($3.13 billion – RRT). Export revenues, despite the growth of deliveries to Europe, has collapsed to the lowest in 12 years: $21.6 billion.

Salaries for top managers of Gazprom have grown by 22%, to 2.129 billion rubles ($34.6 million – RRT). Bonuses of 17 members of the Board for 9 months were increase by 72%.