Russian natural gas and oil producer Gazprom suffered an 86 percent fall in net income in 2014 because of the rouble's weakness, the fall in global oil prices and a dispute with Ukraine. But as Sara Hemrajani reports few were surprised.
It's perhaps a sorry state of affairs when an 86 perce nt fall in annual net income isn't a shock and even prompts a 1 percent share price rise. But then the company in question is Gazprom - Russia's oil and natural gas producer - and the year in question is 2014 - when sanctions were imposed on Russia over Ukraine. The resulting weakness in the rouble combined with the global fall in oil prices caused most of the problems for the state-run energy giant. Higher impairment charges also contributed to a drop in net income to $3.1 billion And the company admitted foreign exchange losses for the year of more than $21 billion. Still sales and investments increased - and some investors say bargains can be found in Russia for those willing to risk the precarious political situation. Dominic Johnson is CEO of Somerset Capital Management. SOUNDBITE: Somerset Capital Management CEO, Dominic Johnson, saying (English): "What I would say is that there are a lot of opportunities in Russia. These companies are extremely cheap, they're still producing oil or making stuff, if only they can be given a bit of a breakthrough, some good governance and some alleviation of Russia's seemingly quite aggressive foreign policy, then it could be a very attractive country again. But in the short term, you're looking at speculation rather than investment." There are other possible clouds ahead for Gazprom. It's been accused of overcharging buyers in eastern Europe and hindering competition. That could mean a large fine from the European Commisson.