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    Home > Headlines > Russia's Gazprom scraps dividend as high interest rates bite
    Headlines

    Russia's Gazprom scraps dividend as high interest rates bite

    Published by Global Banking & Finance Review®

    Posted on May 22, 2025

    2 min read

    Last updated: January 23, 2026

    Russia's Gazprom scraps dividend as high interest rates bite - Headlines news and analysis from Global Banking & Finance Review
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    Tags:oil and gasDividendinterest ratesfinancial crisiscorporate profits

    Quick Summary

    Gazprom cancels its 2024 dividend due to high interest rates and debt servicing costs, affecting government revenue amid economic challenges.

    Gazprom Cancels Dividend Amid Rising Interest Rates and Economic Strain

    By Vladimir Soldatkin and Oksana Kobzeva

    MOSCOW (Reuters) -Russia's state-owned energy giant Gazprom said on Thursday that its board had recommended not paying out a dividend on 2024 results, in line with the government's position and despite the company returning to profitability last year.

    The absence of a dividend is unhelpful to the government, which owns just over half the company's share capital, as it confronts falling oil and gas revenues, high inflation, higher military spending and a budget deficit.

    Gazprom's shares were 4.42% down at 130.5 roubles on the Moscow stock exchange as of 1335 GMT following the announcement.

    The company, according to its own dividend policy approved in 2019, should allocate 50% of its adjusted net profit for the dividend payout.

    Gazprom last month reported a net profit on 2024 results following a loss of almost $7 billion in 2023, its first annual loss since 1999 amid collapsing gas exports to Europe, and some market watchers had not ruled out some kind of dividend payment.

    One industry source has said that Gazprom is tackling high debt servicing costs amid steep interest rates. The central bank's key rate has stood at a record-high of 21% since last October.

    According to Gazprom's financial report under Russian accounting standards, its interest on debt doubled in 2024 to 482.5 billion roubles from 238.6 billion roubles in 2023.

    "High rates will mean Gazprom's interest payments will rise this year, so the company has likely decided to focus on further reducing its debt burden rather than paying dividends," PSB analysts said.

    Since the start of what Moscow calls its special military operation in Ukraine in February 2022, Gazprom has only once paid an interim dividend - in autumn of that year, thanks to rising earnings from high gas prices in Europe at the time.

    Gazprom also did not pay a dividend on its 2021 results, ditching an annual dividend for the first time since 1998, because of high taxes and spending.

    (Reporting by Vladimir Soldatkin and Oksana Kobzeva, Editing by Louise Heavens/Andrew Osborn)

    Key Takeaways

    • •Gazprom cancels 2024 dividend despite profitability.
    • •High interest rates impact Gazprom's financial decisions.
    • •Government revenue affected by dividend cancellation.
    • •Gazprom's debt servicing costs have doubled in 2024.
    • •Economic strain due to high inflation and military spending.

    Frequently Asked Questions about Russia's Gazprom scraps dividend as high interest rates bite

    1Why did Gazprom decide not to pay a dividend?

    Gazprom's board recommended not paying a dividend due to high debt servicing costs and the need to focus on reducing its debt burden amid steep interest rates.

    2What is the current interest rate set by the central bank?

    The central bank's key interest rate has been at a record-high of 21% since last October.

    3How did Gazprom's financial performance change in 2024?

    Gazprom reported a net profit in 2024 following a significant loss of almost $7 billion in 2023, marking its first annual loss since 1999.

    4What impact did the military operation in Ukraine have on Gazprom's dividends?

    Since the start of the military operation in Ukraine in February 2022, Gazprom has only paid an interim dividend once, in autumn 2022, due to fluctuating earnings.

    5What was Gazprom's dividend policy regarding profit allocation?

    According to its dividend policy approved in 2019, Gazprom should allocate 50% of its adjusted net profit for dividend payouts.

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