Russian energy giant Gazprom has released 2017 IFRS result showing a FY 2017 profit of RUB 766 bn.

The net result was down 25% on the FY 2016 net result of RUB 997.1 bln, despite net sales rising from FY 2016 RUB 6.1 tn to FY 2017 RUB 6.5 tn, as operating profit rose from FY 2016 725.5 bn to FY 2017 870.6 bn.

Kommersant reported the result reflected the impact of forex fluctuations, with net debt also rising by 24% year on year to RUB 2.4 tn funding a 10% expansion of the investment program, with a RUB 2.6bn payment to Naftogaz of Ukraine following the recent Stockholm Arbitration case, also adding to the bottom line hit.  Kommersant also noted the 38% hike in payments under Russia’s Minerals Extraction Tax regime to RUB 1.4 tn.

Vedomosti highlighted that the IFRS result is a key benchmark for Gazprom dividend payments, which has been subject of dispute for some time between Gazprom management and the Finance Ministry, with the Ministry seeking 50% of IFRS net profits in dividends, but the company seeking to reduce this owing to the size of its investment needs, including NordStream II and Power of Siberia.  Vedomosti also highlighted that the company had also cut back on remuneration to its Board of Directors to RUB 4.5bn from 4.6bn a year earlier.

Gazprom noted in its release that Russian sales had climbed 7% year on year, while sales to former Soviet nations fell 5%, and sales to Europe rose 4%.  Refined products sales rose 13% and refined condensate and crude sales spiked 31% as operating expenses climbed 9% year on year.