Gazprom, the Russian gas giant, has opted not to pay dividends on last year's earnings, the first time since 1998, sending its shares down 27 per cent.
"The shareholders decided that in the current situation it is not advisable to pay dividends based on the 2021 results," Deputy CEO Famil Sadygov said.
He went on to say that Gazprom would rather focus on Russian regional gasification, heating season preparation, and paying more taxes.
Gazprom shares fell more than 27 per cent as a result of the decision, which rejected a board recommendation to pay a dividend of 52.53 roubles per share, the company's largest payout.
Gazprom intends to invest 526 billion roubles ($10 billion) by 2025 to boost Russia's gasification from 72 per cent to 100 per cent.
As the government increases social benefits, lawmakers are considering putting a greater mineral extraction tax on the corporation.
"This is a disaster for Gazprom shares, as the company's only investment appeal was high dividends. The decision is also likely partly linked to the finance ministry's willingness to increase... budget revenue," Tinkoff Investments analysts said.
Gazprom's decision comes as the Group of Seven economic powers considers capping the price of Russian oil and gas in order to prevent Moscow from benefitting from its actions in Ukraine, which have caused energy costs to skyrocket.
Russian gas flows to Europe have also decreased via Ukraine and the Nord Stream 1 project.
Gazprom did not mention the G7 recommendations to curb gas prices or the lower flows to Europe in its Thursday statement, both of which threaten to reduce its revenue and potentially its tax payments.
(Source:www.businesstoday.in)
"The shareholders decided that in the current situation it is not advisable to pay dividends based on the 2021 results," Deputy CEO Famil Sadygov said.
He went on to say that Gazprom would rather focus on Russian regional gasification, heating season preparation, and paying more taxes.
Gazprom shares fell more than 27 per cent as a result of the decision, which rejected a board recommendation to pay a dividend of 52.53 roubles per share, the company's largest payout.
Gazprom intends to invest 526 billion roubles ($10 billion) by 2025 to boost Russia's gasification from 72 per cent to 100 per cent.
As the government increases social benefits, lawmakers are considering putting a greater mineral extraction tax on the corporation.
"This is a disaster for Gazprom shares, as the company's only investment appeal was high dividends. The decision is also likely partly linked to the finance ministry's willingness to increase... budget revenue," Tinkoff Investments analysts said.
Gazprom's decision comes as the Group of Seven economic powers considers capping the price of Russian oil and gas in order to prevent Moscow from benefitting from its actions in Ukraine, which have caused energy costs to skyrocket.
Russian gas flows to Europe have also decreased via Ukraine and the Nord Stream 1 project.
Gazprom did not mention the G7 recommendations to curb gas prices or the lower flows to Europe in its Thursday statement, both of which threaten to reduce its revenue and potentially its tax payments.
(Source:www.businesstoday.in)
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