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. Last Updated: 07/27/2016

Gazprom Nets $1.9Bln in Quarterly IAS Debut

The world's largest gas producer, Gazprom, said Friday it had swung into profit in the first quarter of 2003 after a loss in the same period last year, helped by higher gas prices and a lower tax bill.

Gazprom said in a statement that first-quarter net profit, to international accounting standards, was 55.97 billion rubles ($1.86 billion) after a 4.33 billion ruble net loss a year earlier.

The first-quarter 2003 figure, the first time Gazprom has published quarterly results, came in close to an average forecast, from four analysts, of $1.81 billion.

Analysts said that not only higher prices and sales, but also Gazprom's stringent costs policies, had pushed the company into the black.

"Results are very good," said Aton brokerage analyst Temirbulat Karimov. "Revenues are higher than our forecast by 14 percent, EBITDA at $3.4 billion by 13 percent ... net profit by 30 percent."

Gazprom did not provide the figure for earnings before interest, tax, depreciation and amortization.

The company said its operating expenses had increased by 26 percent to 157.47 billion rubles.

"This increase was primarily due to higher depreciation (3.87 billion rubles), transit costs (6.13 billion rubles), staff costs (6.36 billion rubles) and costs of refined product processing (3.52 billion rubles)," it said.

UFG investment house analyst Pavel Kushnir said the rise in expenses was in line with inflation and spending for higher sales and refining.

Karimov said high gas prices, which continued into the second quarter, would translate into even better results for the second quarter.

"That is why it is very good to invest in Gazprom local shares at current levels," he said.

 The Economic Development and Trade Ministry will work out a plan to overhaul Gazprom by Feb. 1, First Deputy Minister Andrei Sharonov said Friday.

Last month the government pulled Gazprom's long-debated modernization off its agenda, citing disagreements between the ministry and Gazprom.

"Ministries together with Gazprom have been ordered to continue working on reforming the gas market and present new proposals by Feb. 1," Sharonov said.

Economic Development and Trade Minister German Gref said after the debate on Gazprom was postponed that the Cabinet would discuss the issue before 2004.

Sharonov said then that even if the Cabinet did tackle the issue this year real steps to reform Gazprom would have to wait until after next March's presidential election.

The ministry wants to separate Gazprom's transportation and production businesses to make the company's financial transactions more transparent.

Gazprom opposes the idea, saying it will lead to the breakup of the giant.