April 26, 2018 / 4:18 PM / a month ago

Russia's Gazprom says 2017 net profit falls 25 pct y/y

MOSCOW (Reuters) - Russian gas giant Gazprom (GAZP.MM) said on Thursday its earnings fell 25 percent year-on-year in 2017, partly due to higher debt and costs of a legal dispute with Ukraine.

FILE PHOTO: A flag with the logo of Russian gas giant Gazprom flies in front of Zagorsk Pipe Plant (ZTZ) outside Moscow, Russia May 29, 2017. Picture taken May 29, 2017. REUTERS/Sergei Karpukhin/File Photo

Net profit for the year totaled 714.3 billion roubles ($11.41 billion), the company said, down from 951.6 billion roubles a year earlier.

Analysts polled by Reuters had expected the company to post a net profit of 684 billion roubles.

Net debt increased 24 percent year-on-year to 2.4 trillion roubles, Gazprom said, due to currency exchange rates.

The company also booked reserves of more than 198.8 billion roubles, mainly due a legal dispute with Ukrainian state-owned energy firm Naftogaz.

    Gazprom has to pay Ukraine $2.56 billion after a Stockholm court found in Naftogaz’s favor in the final stage of a long-running legal battle in February.

    This sum is net of mutual claims and counter-claims related to gas supplies and transit. Naftogaz was awarded damages of $4.63 billion, but since the court previously ordered Naftogaz to pay Gazprom for gas supply arrears, the net payment Gazprom will have to make to Ukraine is $2.56 billion.

    Revenue totaled 6.5 trillion roubles in 2017, Gazprom said, while earnings before interest, taxation, depreciation and amortization (EBITDA) came in at 1.47 trillion roubles.

    ($1 = 62.5978 roubles)

    Reporting by Oksana Kobzeva and Vladimir Soldatkin; Writing by Jack Stubbs; Editing by David Evans

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