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Russia’s Gazprom surge after bumper profit and dividend announcement

Employees work at the Alexander Zhagrin oilfield operated by Gazprom Neft in Khanty-Mansi Autonomous Area–Yugra, Russia, in this picture released August 30, 2022. Stoyan Vassev/Press service of Gazprom Neft/Handout via REUTERS ATTENTION EDITORS – THIS IMAGE HAS BEEN SUPPLIED BY A THIRD PARTY. NO RESALES. NO ARCHIVES. MANDATORY CREDIT.

Stoyan Vassev | Press service of Gazprom Neft | via Reuters

Russian gas giant Gazprom posted a record first-half profit and promised new dividends to shareholders, sending its shares soaring more than 27% in early trade in Moscow on Wednesday.

The majority state-owned energy company said its board had proposed a dividend of 51.03 Russian rubles ($0.85) per ordinary share for the first half of 2022. In its first-half earnings report on Tuesday, Gazprom announced a record 2.5 trillion ruble ($41.75 billion) net profit.

The leap in the group’s share price took Russia’s dollar-denominated RTS index 3.6% higher and the ruble-denominated MOEX Russia Index 4.7% higher by late morning in Moscow.

The company has been at the forefront of concerns about Russian gas flows to Europe in light of the invasion of Ukraine and subsequent economic sanctions against Moscow from Western powers, which have prompted the European Union to rapidly seek alternative energy sources.

Gazprom announced Tuesday that it would halt gas deliveries to Europe via its main Nord Stream 1 pipeline for three days from Wednesday, citing maintenance requirements. The group has also suspended flows to French utility Engie from Thursday, citing a payment dispute.

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