UK Markets closed

Gazprom says H1 net profit $41.8 billion, will pay dividends

·2-min read
Illustration shows natural gas pipeline and Gazprom logo

MOSCOW (Reuters) -Russian gas giant Gazprom made a record 2.5 trillion roubles ($41.75 billion) in net profit in the first half of 2022 and its board recommended paying interim dividends after skipping its annual payout for the first time since 1998, the company said on Tuesday.

Gazprom dividends are a sensitive issue for the market, which was disappointed by the Russian government, Gazprom's main shareholder, June decision not to pay dividends on last year's results.

"Despite sanctions pressure and an unfavourable external environment, the Gazprom Group reported record IFRS revenues and net profit in the first half of 2022, while reducing net debt and leverage to a minimum," Famil Sadygov, Gazprom's deputy chief executive, said in a statement.

After adjustments, the base for paying dividends reached 2.4 trillion roubles, Sadygov said.

Western countries imposed unprecedented economic and financial sanctions against Russia after it began what it calls a "special military operation" in Ukraine on Feb. 24.

On Tuesday, Gazprom said its board recommended paying 51.03 roubles ($0.8558) per ordinary share in dividends on the first half of 2022, taking the overall dividend payout to 1.208 trillion roubles ($20.26 billion).

The board's decision is subject for shareholders' approval. Their extraordinary general meeting is scheduled for Sept. 30.

Sadygov also said Gazprom plans to stick to its dividend policy that envisages paying at least 50% of adjusted net profit in dividends.

In May, Gazprom's board had recommended to pay record 52.53 roubles in 2021 dividends, spurring a rally in its shares. But slightly more than one month later, Gazprom shares plunged nearly 30% in just one day after the government's decision not to pay dividends.

Before the dividend announcement on Tuesday, Gazprom shares outperformed the broader market and ended the Moscow trading session 7.4% higher at 204 roubles per share, its highest since July 6. The benchmark MOEX index added 0.45% on the day.

($1 = 59.8750 roubles)

(Reporting by Andrey Ostroukh; Editing by Josie Kao)