How Did the Shares of Public Joint Stock Company Gazprom React to the Financial Report Indicating a Profit of 1.2 Trillion Russian Rubles?
The shares of Public Joint Stock Company Gazprom fell on the Moscow Exchange following the release of its financial results for the year 2024.
Gazprom reported a net profit under International Financial Reporting Standards (IFRS) of 1.219 trillion Russian rubles for 2024. Following the publication of the financial report, shares of the state-owned gas giant declined, although they later rebounded.
Shares of Public Joint Stock Company Gazprom (ticker: GAZP) on the Moscow Exchange corrected after the publication of the company’s IFRS results for the fourth quarter and the full year 2024. Prior to the release of the results, the shares had been trading up by approximately 2.5 percent, but by 15:47 Moscow time, the price had dropped by 0.91 percent, reaching 147.9 Russian rubles.
However, by 16:00 Moscow time, the shares had already begun to recover and were trading up by 0.95 percent, reaching 150.68 Russian rubles.
For the year 2024, Gazprom’s net profit under IFRS amounted to 1.219 trillion Russian rubles, compared to a net loss of 629 billion Russian rubles in 2023, the company reported. Revenue increased by 25 percent, reaching 10.7 trillion Russian rubles, which represents the second-highest figure in the company’s history. Every segment of Gazprom’s business contributed to the revenue growth.
“A significant contributor to net profit was the reduction of negative foreign exchange differences on foreign currency liabilities, as well as an increase in interest income from the placement of funds, which offset the rise in interest expenses. Net profit adjusted for non-cash items amounted to 1.433 trillion Russian rubles, which is twice as high as in 2023,” said Famil Sadygov, Deputy Chairman of the Management Committee of Gazprom.
The EBITDA indicator for 2024 increased by 76 percent, reaching 3.1 trillion Russian rubles, making it the third-highest result in the company’s history. Only in 2021 and 2022, during a period of sharply rising natural gas prices on the European market, did Gazprom report higher EBITDA results.
The total debt of the Gazprom Group remained at approximately the same level as in 2023, totaling 6.7 trillion Russian rubles. The net debt to EBITDA ratio decreased from 2.8 in 2023 to 1.8 in 2024. The company also reported maintaining a significant liquidity cushion, which in 2024 stood at 1.034 trillion Russian rubles. According to the company, this level of reserves ensures strong financial stability, even under sanctions pressure.
The main issue for investors is now whether Gazprom will pay dividends for the year 2024, according to analysts at Alor Broker investment company. Recently, and quite unexpectedly, VTB Bank announced the distribution of its 2023 profits as record-high dividends, said Alexey Antonov, Head of Investment Consulting at Alor Broker. According to the expert, it is possible that this decision was made at the initiative of the major shareholder — the state. Analysts suggest that the authorities may have decided to take a stricter approach to dividends: if there is a profit, then all state-owned companies, with few exceptions, should allocate 50 percent of it to dividend payments.
The Board of Directors of Gazprom is scheduled to consider the dividend recommendation for 2024 in May, and the Annual General Meeting of Shareholders (with the state being the controlling shareholder) is expected to take place in June.
Analysts at BCS World of Investments believe that the issue of dividend payments by Gazprom for 2024 remains unclear, as the federal budget does not include planned dividend revenues from the company. The firm’s experts estimated adjusted net profit for 2024 at 1.26 trillion Russian rubles, and potential annual dividends at 26 Russian rubles per share.
Alfa-Bank analysts also believe that Gazprom’s dividend payout remains uncertain. Despite the absence of dividend income from Gazprom in the federal budget draft, they estimate that the dividend base could be approximately 1 trillion Russian rubles, and that a 50 percent payout could result in dividends of up to 21.35 Russian rubles per share. According to the bank’s analysts, the Board of Directors’ decision in May may become a key driver for Gazprom’s share price performance.
