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. Last Updated: 07/27/2016

Gazprom's RAS Results Show 7% Rise in Profit

APGazprom CEO Alexei Miller
Gazprom on Friday posted a 7 percent year-on-year increase in net profit for the first half of 2001, but the improvement was overshadowed by a downward re-evaluation of assets.

CEO Alexei Miller shrugged off the results, saying the financial situation was "completely normal."

Gazprom announced profits of 67.7 billion rubles ($2.4 billion), while revenues jumped 31 percent to 312.8 billion rubles. The financials were audited to Russian Accounting Standards.

Net profit for 2001 is expected to reach 100 billion rubles, Prime-Tass reported Miller as saying. In 2000, net profit totaled 48.5 billion rubles.

However, Ernst & Young reassessed the gas monopoly's fixed assets, whose value decreased by 772.3 billion rubles from last year, eating away much of Gazprom's profit.

"As a result, real improvement in profitability was hidden in the accounting numbers," the United Financial Group brokerage said in a research note.

"Gazprom benefited from stronger export prices and two consecutive domestic tariff increases."

Other analysts did not comment on the RAS financials, saying a more accurate portrait is drawn by the annual report audited to International Accounting Standards.

At a meeting with shareholders, Miller said Gazprom would not attract big loans in the future and would allocate funds toward ongoing investment projects. He added that Gazprom's current capitalization was $12 billion.

"Gazprom's capitalization should be at least $40 billion only taking estimated reserves into account," Miller said, adding that this figure would increase substantially if transportation and distribution infrastructure were taken into account.

Miller confirmed that Gazprom has prepared a bond issue, but the issue date has yet to be determined.

Revenues from gas sales increased by 28 percent, ringing in at 257.4 billion rubles.

Exports accounted for 78 percent of all gas sales, a 23 percent increase over the same period last year, bringing in 201.3 billion rubles.

Meanwhile, Gazprom already has paid the government 836 million rubles in 2000 dividends as of Sept. 15, Interfax reported. The government owns 38 percent of the company.

Earlier this year, Gazprom shareholders decided on dividends of 30 kopeks per share.

Dividends should be increased this year, Miller said, eventually taking up about 30 percent of the company's net income instead of 10 percent currently.