Gazprom is taking a look at each avenue to chop prices, together with its portfolio of luxurious motels, after the group fell to its second successive yr of losses as Russia’s battle with Ukraine continues to hammer power exports.
The group’s internet losses on Russian Accounting Requirements (RAS) hit 1.076 trillion roubles ($12.89 billion) final yr, largely attributable to a decline out there worth of shares in Gazprom’s oil division, Gazprom Neft, based on Interfax, Reuters reported.
The identical RAS determine in 2023, which doesn’t embrace the outcomes of subsidiaries, gave Gazprom a revenue of 695.6 billion roubles ($7.51 billion).
Gazprom Group fell to its first loss in 24 years in 2023 as EU sanctions took their toll on the group, with fuel exports to the EU plunging 55% in contrast with 2022.
An inside Gazprom report obtained by the Monetary Instances final yr instructed the group might not get better its pre-war export revenues till 2035 because it struggles to seek out options to the profitable European market.
The corporate has began to chop prices on account of continued losses, reeling again years of exuberant purchases as the corporate basked in outsized power revenues. In January, Gazprom confirmed it was contemplating shedding administrative employees amid studies headcount may fall by as much as 40%.
Final yr, Gazprom stated it was promoting off a few of its luxurious property belongings, together with a spread of Gazprom-owned motels, which it used to reward workers with holidays and to host conferences.
In response to a report by Reuters, Gazprom is now contemplating promoting off its palazzo-style export headquarters in St Petersburg, a direct results of falling demand to the West.
Certainly, Reuters’ report suggests Gazprom Export has decreased its variety of workers from 600 previous to the invasion of Ukraine to some dozen.
A consultant for Gazprom didn’t instantly reply to a request for remark.
As revenues for the once-crucial power sector dry up and Russia’s battle with Ukraine strikes into its fourth yr, hopes are rising for a peace deal to forestall a monetary crash as Russia’s non-war associated sectors come below pressure.
Russia has tried to offset the lack of its important European power export enterprise by rising commerce with China. Nonetheless, it hasn’t been capable of exchange the amount of exports it loved in Europe, whereas China has had extra leverage to barter costs as Russia struggles to seek out patrons for its power.
Vladimir Putin is because of communicate with Donald Trump over the cellphone on Tuesday to proceed peace talks over the battle in Ukraine. Trump’s election has elevated the chance of a peace deal because the U.S. threatens to drag navy help for Ukraine. A ceasefire may open the door to the lifting of sanctions.
Nonetheless, analysts are skeptical that Europe would return to turn out to be a keen purchaser of Russian power within the occasion that sanctions are lifted, with new suppliers being recognized and different types of power receiving extra funding since 2022.
This story was initially featured on Fortune.com
