July 14, 2020 / 8:47 AM / 23 days ago

UPDATE 1-Russia's Gazprom swings to first-quarter loss on oil and rouble

(Adds detail, quotes, background, share price)

MOSCOW, July 14 (Reuters) - Russia’s Gazprom swung to a hefty first-quarter loss as low oil prices and a weaker rouble took their toll on earnings, though its shares remained bolster by a dividend pledge from the energy giant.

Gas sales to Europe, Gazprom’s key market, fell in the first three months of the year and oil prices plunged after the March failure of the world’s top producers to agree to agree joint output curbs.

Gazprom’s Deputy Chairman Famil Sadygov, however, said the company’s loss was “on paper” only and mainly attributable to a sharp drop in the value of the rouble that followed a drop in global oil prices.

Its first-quarter net loss came in at 116 billion roubles ($1.64 billion), compared with a net profit of 536 billion roubles in the same period last year.

Gas sales to Europe and China were down 17% at 52 billion cubic metres while the average price slid 36% to 10,800 roubles ($152) per 1,000 cubic metres, sending Gazprom’s revenue down by a quarter to 1.7 trillion roubles.

Excluding currency fluctuations, Gazprom would have posted a 288 billion rouble net profit, Sadygov said, adding that the company would use that estimate rather than the net loss when calculating dividends on this year results.

Gazprom shares had lost 1% by 0840 GMT, outperforming a 1.6% decline for the wider Russian stock index. ($1 = 71.1200 roubles) (Reporting by Maxim Rodionov and Olesya Astakhova Writing by Tom Balmforth and Katya Golubkova Editing by David Goodman)

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