Gazprom sees gas price rises boost profits

RUSSIAN gas monopoly Gazprom said net profit doubled in the first half of 2006 as prices for gas in Europe and Russia rose and the firm sold bigger volumes.

Net profits rose to 177 billion roubles (€5.1bn), while revenues increased by 39% to 827.9bn roubles.

The results on Wednesday were non-consolidated and prepared under Russian accounting standards (RAS), which differ significantly from international standards but are used to calculate the annual dividend.

Analysts at UralSib Bank said the results were positive and that the forthcoming reweighting of Gazprom in Morgan Stanley’s benchmark MSCI index on August 17 would probably add more positive sentiment around the stock.

“Although RAS results are only somewhat indicative, the 102% year-on-year surge in net profit points to a positive trend in sales growth,” UralSib said in a note. “We expect a positive reaction, although the main driver is still the upcoming MSCI rebalancing.”

Troika Dialog brokerage said the results were neutral, because higher revenues were due to a rise in domestic gas prices and consolidation of oil firm Sibneft.

“Overall, we do not expect these RAS figures to influence the share price,” Troika said in a note.

Gazprom was slightly up on the RTS exchange and slightly down on the MICEX bourse, in line with the broader market.