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Gazprom shares plunge as Russian gas producer cancels dividend for first time since 1998

Thursday, June 30, 2022 11:03 a.m.

Gazprom opted not to pay dividends on last year’s financial results as shareholders were deprived of what would have been the gas titan’s biggest payout.

It is the first time that shareholders will not be rewarded since 1998 after choosing to overturn a board recommendation to pay a dividend of 52.53 rubles per share.

Shares of the Russian gas giant fell 27% on Thursday morning.

The company’s deputy chief executive, Famil Sadygov, said shareholders had concluded that it was “not advisable to pay dividends based on 2021 results”, given the “current situation”.

The company intends to invest 526 billion rubles ($10 billion) by 2025 to boost Russia’s gasification from its current level of 72%.

Last month, Gazprom cut gas supplies to Germany, refusing to supply Orsted and Shell Energy, after the two companies refused to make ruble payments.

The company has also suspended supplies to GasTerra in the Netherlands, as well as Bulgaria, Poland and Finland, for the same reason.

Walid Koudmani, chief market analyst at financial broker XTB, said: “While the company made record profits last year due to rising energy prices, it was hit hard by the sanctions and the geopolitical tensions caused by the Russian-Ukrainian conflict.

“Despite the possibility that this was a calculated risk that caused stock prices to fall significantly, it could lead to taking the necessary measures in the medium and long term to maintain an efficient supply, especially in Russia.