Shares of Russian gas lading firm decrease to 2009 low
Date
12/18/2024 7:25:44 AM
(MENAFN) Shares of Gazprom, the Russian state-owned energy giant, fell to their lowest level in nearly 16 years on Tuesday after Ukraine announced it would not renew its gas transit agreement with Russia after December 31. Despite gazprom still supplying gas to several Central European nations via Ukraine’s transmission network, the company's stock hit 106.1 rubles ($1.02) per share, the lowest since January 26, 2009, when it was priced at 101.64 rubles. Although the stock recovered slightly later, it continued to follow a broader decline on the Moscow Stock Exchange.
Analysts pointed to several factors contributing to the drop, including reduced profits, geopolitical risks, halted dividend payments, and weak overall market performance. The Ukrainian government's announcement added to the company's woes. Ukrainian Prime Minister Denis Shmigal revealed on Monday that Ukraine would not extend the deal that allows Russian gas to transit through its pipelines, effective January 1, 2025. He indicated openness to discussions with other countries regarding non-Russian gas transit.
Though Gazprom has shifted some focus to increased exports to Asia in an attempt to offset falling European demand, Ukraine’s decision is expected to hurt the company’s profits further. Although some European countries continue to import Russian gas due to competitive prices, the overall impact could be significant. Ukraine’s pipeline network, which connects to neighboring countries like Moldova, Poland, Romania, Hungary, and Slovakia, still carries about 5% of the EU's gas from Russia.
Once Russia's most valuable company, Gazprom reported record losses in 2023, including a net loss of $6.8 billion, its first such loss since 1999. This came after a sharp decline in gas exports to the European Union, in stark contrast to the $13.2 billion profit recorded the previous year. Gazprom’s total revenue for 2023 fell to $92 billion, down from $126 billion in 2022, with its stock price plunging about 70% since February 2022.
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