Gazprom, Russia's natural-gas exporter, said profit fell 86 per cent on soaring foreign exchange losses, while the ruble collapse helped it generate record free cash flow.
Net income shrank to 159 billion rubles ($3 billion) in 2014 from 1.14 trillion rubles the previous year, the Moscow- based company said in a statement on Wednesday.
That compares with an average estimate of 665 billion rubles from five analysts surveyed by Bloomberg.
The results reflect lower demand in Europe, Gazprom's largest export market, as a mild start to the winter and increased supplies of liquefied natural gas weighed on prices.
European buyers also tapped gas from storage before increasing purchases from Gazprom as they waited for a drop in crude prices to filter through to oil-linked gas-supply contracts.
"The most interesting part of what we noticed is record free cash flow," said Dmitry Loukashov, an oil and gas analyst at VTB Capital in Moscow. "They've never been able to generate that much."
The ruble’s almost 50 per cent collapse helped to both lower capital expenditures and buoy revenue.
The company generated 654 billion rubles of free cash flow, 90 per cent more than the previous year, according to calculations based on numbers in the report.
Net operating cash flows rose 10 per cent. Shares rose 1 per cent to 154.33 rubles in Moscow on Wednesday morning.
- Bloomberg
