Russian gas monopoly Gazprom posted a significant jump in net income for the first quarter against the same period of 2018, though much of the increase came from its financing operations, writes Vladimir Afanasiev.

The company said net income climbed almost 43% to 560 billion rubles ($8.6 billion) in the first quarter, even though gross revenues grew by just 7% to 2.3 trillion rubles ($35.4 billion).

Revenues from sales of gas and liquids actually fell in the reporting period by 2% to 459 billion rubles as operating costs increased 8% to 1.78 trillion rubles.

Total company sales declined to 159 billion cubic metres of gas in the first quarter from 174 Bcm in the same period of 2018, despite better sale prices in its key markets in Russia, Europe and former Soviet Union states.

However, Gazprom reported that its financing activity generated revenues of more than 258 billion rubles in the first quarter of this year against 91 billion rubles a year earlier.

Of this amount, 184 billion rubles came as the result of foreign exchange gains due to fluctuations of the Russian ruble against major international currencies.

Additionally, financing expenses fell to 69 billion rubles from 107 billion rubles, thus providing an additional boost to the bottom line.

Gazprom also said that its net debt stood at about $44 billion at the end of the first quarter, after the deduction of available cash and equivalents from the gross debt figure of $60.2 billion.

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Income boost for Gazprom