Gazprom profits plunge 49.8%

MOSCOW (AFP) – Russian energy giant Gazprom, the world's biggest gas firm, said on Monday that net profit plunged 49.8 percent in the first half of 2009 compared to the figure 12 months earlier owing to higher expenses.

Half-year profits fell to 305.8 billion rubles (10.6 billion dollars), compared to 609.4 billion rubles (21 billion dollars) in the first six months of 2008, the company said in a statement.

Operating expenses and financial charges rose sharply as the cost of purchased gas soared 105 percent, reflecting an increase in prices for gas from Central Asia.

"The increase in the cost of purchased gas was mainly caused by the increase in prices for gas from Central Asia and increase in gas trading activities on the European market," it explained.

The company, which ships 65 percent of its exports to Europe, was also hard hit by a drop in European demand amid the economic downturn as states turned to stocks held in reservoirs in the former Soviet Union.

But Gazprom head Alexei Miller last month said European demand for gas had grown in recent months to exceed pre-crisis levels.

The company, which has its roots in the Soviet Union's Gas Industry Ministry, now has 17 percent of the global gas market and 60 percent of the Russian market. The state retains a controlling stake of 50 percent.

It said that net sales in the first half fell by 6.6 percent to 1.6 trillion rubles (56.6 billion dollars).

Sales of gas to Europe and other states had increased by 6.0 percent as higher prices across the world compensated for drastic falls in export volumes, it added.

Gazprom said its debt for the six months to July had increased 31 percent to 1.3 trillion rubles (48 billion dollars) from 1 trillion rubles (34.5 billion dollars) at the end of last year.