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. Last Updated: 07/27/2016

Gazprom Posts $7.1Bln Profit

Gazprom reported on Friday better-than-expected net profit for 2004 on the back of higher prices, but costs jumped 19 percent.

The world's largest gas producer blamed higher taxes and input costs as well as pay increases for the cost rise, and reported a $3 billion surge in total debt in the last three months of the year. But the profit beat analysts' expectations.

Gazprom profit under international accounting standards rose 29 percent to 205.68 billion rubles ($7.13 billion). Sales climbed 19 percent to 976.78 billion rubles ($33.88 billion).

A Reuters poll of 11 analysts had shown net profit and sales rising by over a quarter to $6.57 billion and $33.47 billion respectively, based on average dollar exchange rates at the Central Bank of 30.66 rubles for 2003 and 28.81 for 2004.

Gazprom reports its results in rubles, while analysts give their estimates in dollars. The company said operating expenses also rose by 19 percent to 708.9 billion rubles as taxes soared by 37 billion rubles, cost of gas purchases by 40.9 billion, salaries by 22.7 billion and cost of material purchases by 20.5 billion rubles.

Total debt rose to 583 billion rubles ($20.25 billion) from 474.38 billion ($15.5 billion) suggesting a $3 billion jump in the last quarter of 2004. Gazprom had net debt of 492.2 billion rubles at the end of the third quarter on Sept. 30.

Analysts have said the results are likely to be neutral to a market preoccupied with Gazprom's approaching share trade liberalization, which scraps curbs that bar foreigners from directly owning Gazprom's local shares.

Gazprom has promised that the share liberalization will happen by the end of 2005.