Gazprom paid for record losses: shares plummet after refusal to pay dividends

The Russian government has instructed Gazprom not to pay dividends for 2023 due to the company's losses, which for the first time in 25 years amounted to 629 billion rubles. This decision caused the company's shares to plunge on the Moscow Stock Exchange, reducing their value by almost 6%.

This was reported by the Russian media. The Russian government has instructed the relevant ministries – the Ministry of Finance, the Ministry of Energy, and the Federal Property Management Agency – not to provide for the payment of dividends by the company for 2023 when preparing draft directives for participation in the Gazprom board of directors. This decision was made in connection with the financial losses that Gazprom suffered for the first time in 25 years.

The state, which owns 50.23% of the company's shares, decided not to pay dividends to ensure financial stability amid the difficult economic situation. At the end of 2023, Gazprom suffered a loss of 629 billion rubles, compared to a profit in the previous year. The company's revenue decreased by 27% and amounted to 8.542 trillion rubles.

In 2022, Gazprom shareholders were left without dividends as the government redirected funds to cover the budget deficit caused by the war. Nevertheless, in the first half of 2022, the company paid a record dividend of 1.2 trillion rubles (over $13 billion), which amounted to 51.03 rubles per share. These were the highest dividend payments in the history of the Russian stock market.

In 2023, Gazprom faced significant financial difficulties due to a decline in revenues from gas sales to Europe. After the loss of the European market, the company tried to redirect gas supplies to China, but this required approval for the construction of the Power of Siberia 2 gas pipeline. Despite President Vladimir Putin's attempts to negotiate Chinese support during his state visit, no concrete agreements were reached.

On the evening of May 20, Gazprom's shares on the Moscow Stock Exchange plummeted after the company announced its refusal to pay dividends for 2023. The company's quotes fell by almost 6%, reaching their lowest level since October 2023. Gazprom's capitalization decreased by almost $1.6 billion in an hour.

According to British intelligence, Gazprom's revenues will continue to fall at least until 2030 due to the loss of the European market. In 2023, the company pumped about 69 billion cubic meters of gas to its customers, the lowest volume since 1985. Compared to 2022, when pumping volumes were already at a historic low, they decreased by another third.

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