Gazprom 1H revenue 4.99 trillion rubles, -1.9% year-over-year

Gazprom 1H revenue 4.99 trillion rubles, -1.9% year-over-year

Russia's Gazprom Neft has reported a significant decline in its first-half revenue and earnings, reflecting the ongoing challenges faced by the energy sector in the country. According to the company's latest financial results, Gazprom Neft's revenue for the first half of 2025 decreased by 12% year-over-year to 1.775 trillion rubles. This was accompanied by a 54% year-over-year drop in net profit to 150.5 billion rubles.

The company attributed the decline to a combination of factors, including higher taxes, a weaker ruble, and increased export duties and mineral extraction levies. These external headwinds have squeezed margins across both upstream and refining operations, impacting the overall financial performance. Gazprom Neft's adjusted EBITDA also fell by 27.6% to 510.1 billion rubles, reflecting the strain on the company's profitability.

Despite the challenges, Gazprom Neft maintained its focus on operational efficiency and project execution. The company reported higher hydrocarbon output and throughput in the period, and continued to advance brownfield recovery and modernize refining assets to protect unit cash costs. However, the outlook for the second half of the year remains uncertain, with investors closely monitoring the ruble's trajectory, refining margins, and any changes to Russia's fiscal regime.

The shift in crude and refined products away from European markets towards Asian buyers, driven by Western sanctions, has also increased logistics costs and narrowed netbacks for Gazprom Neft. This structural drag on the company's operations has compounded the impact of domestic fiscal measures, further challenging its financial performance.

Gazprom Neft's interim dividend payout of 17.3 rubles per share, representing at least 50% of IFRS profit, underscores the company's commitment to balance-sheet discipline in a weaker pricing environment. However, the company's capital expenditures were trimmed by 15.8% year-over-year to 222.1 billion rubles, reflecting a recalibration of spend after a heavy build program in 2024 and early 2025.

The company's first-half results highlight the ongoing challenges faced by Russian energy producers, and investors will be closely watching the developments in the second half of the year.

References:

[1] https://oilprice.com/Latest-Energy-News/World-News/Gazprom-Neft-Earnings-Halved-In-H1-On-Taxes-Weak-Ruble.html