Russian state-owned natural gas firm Gazprom had a rough go of it last year, to say the least, as net profits fell 86 percent. The FT reports:
Gazprom, the world’s biggest gas producer which accounts for about a fifth of Russian government revenue, reported on Wednesday that net income attributable to its shareholders for 2014 fell to Rbs159bn ($3.1bn) from Rbs1.1tn in 2013.
A weak ruble goes a long way towards explaining this plunge in profitability, but so too can the company’s decision to shut off gas to Ukraine, one of its biggest customers. So far thanks to a lag in the pricing model, the fall in the price of oil—a benchmark that Gazprom looks to when setting its own gas prices—isn’t yet reflected in the company’s balance sheets. In fact, Gazprom reported that the average price at which Europe bought its gas was up 11 percent in 2014.
Not a good sign for Vlad’s neighbors. When will he raise the dead specter, of debts still owed to the motherland, and start moving troops to more borders?