CONSENSUS: Gazprom Q1 net profits up by 27%
MOSCOW. Aug 26 (Interfax) - Gazprom will post first-quarter net profits to International Financial Reporting Standards (IFRS) that are up 27% on average, according to the results of an Interfax survey of eighteen analysts.
The average net profit forecast is 413.5 billion rubles. Troika Dialog , which produced the closest prediction for the previous quarter, expects Q1 net profits of 470 billion rubles.
Troika analyst Oleg Maksimov cautioned, "Considering the forecast for Gazprom capital investments (significantly more than $40 billion this year) and that the first quarter usually differs with great activity in capital construction, it is not ruled out that free cash flows could be very low. The market might not fully realize the record high reported figures for profits and losses for the quarter, if free cash flows are close to zero."
Karen Kostanyan of Bank of America Securities - Merrill Lynch is even more pessimistic. He thinks that free cash flow will be negative at 45 billion rubles. The reason for this is in forced investment, and Merrill Lynch estimates the gas monopoly spent 417 billion rubles on investments - half of the entire investment program for the year. Other analysts in the gas pool also anticipate a negative cash flow.
A major factor in predicting the results for the quarter is profits taken on exchange rate differences: Troika estimates that at "over $2 billion," JP Morgan at $1.012 billion, and Raiffeisen at 50 billion rubles.
The consensus forecast says sales revenues will come to 1.255 trillion rubles and EBITDA (earnings before interest, taxes, depreciation, and amortization) to 550 billion rubles.
Gazprom is expected to release its report on August 30.
