UPDATE 3-Russia's Gazprom sees firmer FY 2013 core earnings

Thu Jan 23, 2014 10:57am EST

* Q3 profit $8.13 billion

* Exports to Europe seen at no less than 150-155 bcm

* Ukraine owed Russia $2.7 bln for gas as of end-2013 (Releads, adds detail, background, quote)

By Alessandra Prentice and Denis Pinchuk

MOSCOW, Jan 23 (Reuters) - Gazprom OAO, the world's top gas producer, on Thursday raised its estimate of core earnings for the year just ended but cautioned that exports to Europe, the source of half of its revenue, could fall slightly in 2014.

The upward revision to its forecast for earnings before interest, taxation, depreciation and amortisation (EBITDA) to $58-$59 billion came after a 23 percent gain in core third-quarter earnings.

Net profits declined by 10 percent, however, because of an unusually large currency gain in the same quarter a year earlier, estimated Alfa Bank analyst Alexander Kornilov.

State-controlled Gazprom revised upwards its full-year EBITDA guidance from the previously expected $55 billion, after gas exports to Europe jumped 16 percent year-on-year to 162 billion cubic metres (bcm).

The firm had an advantage on the European market in 2013 after exports from Africa fell due to political instability, while flows from energy-rich Norway also declined as a result of technical issues.

The firm sees exports to Europe flat or somewhat lower in 2014, Sergey Budzulyak, the deputy head of Gazprom's department for exports to Western Europe, said in a conference call.

"This year we expect to stick to this figure (162 bcm), but we're setting ourselves a goal of no less than 150-155 bcm," Budzulyak said.

The firm expects neighbouring Ukraine to step up imports of Russian gas to 35-40 bcm in 2014, up from around 27 bcm last year, after Russia agreed to slash the price of gas for Ukraine when Kiev walked away from a free trade pact with the European Union.

Ukraine owed Russia $2.7 billion for gas supplies as of the end of 2013, a Gazprom representative said on the conference call, which analysts had hoped would shed some more light on the company's ongoing gas talks with China.

On Wednesday, Gazprom proposed signing a major China gas export deal in May, while industry sources indicated that the Russian gas giant may offer a lower price in return for billions of dollars in upfront payments.

Gazprom confirmed its hope of signing an agreement in May on Thursday, but gave no further details.

Gazprom's Moscow-listed shares closed down 0.1 percent, while its London-listed depositary receipts were trading down 2.1 percent at 1530 GMT. ($1 = 33.9392 Russian roubles) (Writing by Alessandra Prentice; Editing by Douglas Busvine and Tom Heneghan)

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