“Gazprom” comes true – Newspaper Kommersant No. 159 (7360) dated 08/31/2022

Gazprom, which has already deceived shareholders’ expectations once this year, has given them new hope. The monopoly wants to pay the first in its history and immediately record interim dividends for the first half of the year in the amount of 1.2 trillion rubles. Just two months ago, Gazprom refused to pay almost similar dividends for the entire year of 2021, citing an unplanned increase in the tax burden.

The Board of Directors of Gazprom voted in absentia to convene an extraordinary meeting of shareholders on September 30, which will consider the issue of paying interim dividends for the first half of the year. So far, Gazprom has not paid any interim dividends. The Board of Directors recommended that the shareholders pay 51.03 rubles for the first half of the year. per share, or in total more than 1.2 trillion rubles. This almost corresponds to the amount of declared dividends for the whole of 2021 (1.244 trillion rubles), which Gazprom decided not to pay at the last moment. The register of shareholders closes on 11 October.

The financial director of the monopoly, Famil Sadygov, said that the dividend base of Gazprom, that is, net profit adjusted for non-monetary items, in the first half of the year amounted to 2.4 trillion rubles, and the net profit itself – 2.5 trillion rubles. Thus, the company is going to give shareholders half of the profits, which is in line with the dividend policy. This also means that in the first half of the year alone, Gazprom received a large net profit, as in the whole of 2021 (2.09 trillion rubles).

The company has not yet announced whether it intends to disclose financial statements for the first half of the year. According to Famil Sadygov, Gazprom’s management in the future “intends to adhere to the current dividend policy and propose recommendations to the board of directors on paying at least 50% of adjusted net profit.”

Meanwhile, just two months ago, when Gazprom’s management should have had a good idea of ​​the size of net profit in the first half of the year, shareholders of the state-controlled company unexpectedly canceled dividends for 2021. This was explained by the decision of the Ministry of Finance to increase the tax burden on Gazprom by exactly 1.2 trillion rubles, which was planned to be paid in the form of dividends. Then the quotes of “Gazprom” for the day collapsed by more than 30%, and the entire Russian stock market lost more than 7% (see “Kommersant” on July 1). The company’s shares fell to their lowest level since the pandemic.

Information on interim dividends was published after the close of trading on the Moscow Exchange, however, during the day of August 30, Gazprom shares rose by more than 7% for no apparent reason (for more information on the market situation, see page 8).

Record gas prices could support Gazprom’s management plans to pay dividends. Thus, in August, the average gas prices in Europe were 2.3 times higher than the average in the first half of the year, which promises Gazprom even higher profits. But by the end of the summer, gas quotes are moving away from the peaks against the backdrop of EU successes in filling gas storage facilities. September futures for gas at the TTF hub in the Netherlands on August 30 fell by 3.8% to €261.9 per 1 MWh, or about $2.7 thousand per 1 thousand cubic meters. The spot price for a day ahead delivery fell by 18% to €257 per 1 MWh, or about $2,672 thousand per 1,000 cubic meters.

The price reduction occurred despite the fact that Gazprom will completely stop pumping through the Nord Stream from August 31 to September 3 due to unscheduled repairs. In recent days, gas prices in Europe have been extremely volatile amid sluggish trading and great uncertainty, said Nikita Dobroslavsky from the Center for Sustainable Development of the Skolkovo School of Management.

European gas storage facilities are 80% full, which is the target that the EU countries planned to achieve by October 1st. Germany, the largest gas consumer from the Russian Federation, has already filled its UGS facilities by 83% (according to AGSI +). The EU is gearing up for a tough winter as Russia consistently cuts gas supplies to the continent and prices hit historic records of $3,500 per 1,000 cubic meters. According to the Minister of Economics of Germany, Robert Habek, they will decrease, as Germany has almost reached the goal of filling UGS facilities. In September, according to the forecast of the official, the level of stocks will be 85%.

UGS facilities will not be able to fully compensate for the lack of supplies from the Russian Federation, which on average account for about 30% of the fuel consumed in winter. But this year, gas consumption in Europe should decrease: in the Netherlands it has already fallen by 25% yoy in the first half of the year, other countries are taking active measures to save fuel.

Tatyana Dyatel