UPDATE 1-Gazprom sees profit decline on taxes, rebates

Thu Jun 27, 2013 8:13am EDT

Related Topics

* Expects up to 10 pct fall in 2013 profit

* Gazprom paid 23 billion roubles in rebates to Europe in Q1

* Share down by more than two thirds since 2008 peak (Writes through, adds details)

By Denis Pinchuk

MOSCOW, June 27 (Reuters) - Russia's state-run gas producer Gazprom expects its 2013 net profit to fall by up to 10 percent on the back of low gas tariffs, high taxes and rebates to European clients, company officials said on Thursday.

Andrei Kruglov, Gazprom's chief financial officer, said that revenue and core profit will be unchanged this year, but net profit may decline by up to 10 percent after a 9.2 percent fall in 2012.

Gazprom has agreed to revise long-term gas supply contracts with European companies and return some money to customers in what it described as "retroactive payments".

Rebates to European companies totalled 102.7 billion roubles ($3.22 billion) in 2012 and 23 billion roubles in the first quarter of this year, said Mikhail Roseyev, one of the company's deputy chief accountants.

Kruglov said that Gazprom reserved 200 billion roubles for rebates this year, up from the 114 billion roubles set aside in 2012.

This month a company official said the repayments are expected to total no more than $800-900 million this year, although this excludes possible payments to Germany utility RWE , which has been involved in an arbitration case with Gazprom.

Gazprom's share price is down by more than two thirds since hitting a peak of more than 365 roubles in May 2008, just before Russia was dragged into the global financial crisis, with investors spooked by company's high capital expenditure and weak gas demand in Europe.

By 1120 GMT, Gazprom's shares were down 1.4 percent at 108.57 roubles, underperforming a 0.7 percent fall for the broader Moscow market.

The company faces hard times ahead as the government ponders a decision to slow increases in domestic gas prices as a means to fights inflation.

The government also sent a bill to parliament, proposing a new mineral extraction tax that will increase Gazprom's tax burden if it becomes law. ($1 = 32.9664 Russian roubles) (Writing by Vladimir Soldatkin; Editing by David Goodman)

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