Gazprom, the world's biggest gas company, saw net profit fall in the first quarter, when it paid more for Central Asian gas and incurred foreign exchange losses, but was tipped to bounce back in the rest of 2009.

Net profit at Russia's gas export monopoly fell to 110.18 billion roubles ($3.49 billion) in the first three months of 2009, down 61 percent from last year but well ahead of an average forecast of 84.75 billion from a Reuters poll.

Operating expenses jumped almost a fifth to 648.8 billion roubles.

Gazprom shares slightly underperformed the broader MICEX index to trade down 2.2 percent at 12.46 GMT after rising initially on the results.

That is a pure speculative factor. People are selling it after it had grown, the news flow is still positive for the company on the whole, said Uralsib analysts.

The state-controlled firm plays a key role in the Kremlin's economic policy, having become a vehicle for consolidating a range of domestic energy assets in recent years, including the former Sibneft and Yukos businesses.

REBOUND EYED

Gazprom's profits should rebound in the second and third quarters, analysts said, after a pipeline explosion halted Russian imports of expensive gas from Turkmenistan in April.

A recovery in sales volumes, down nearly 24 percent in the first quarter as a pricing dispute with Ukraine weighed, should also help offset lower gas prices in the second half of 2009.

The third quarter should be better thanks to rising gas tariffs (at home) and exports volumes, UniCredit analyst Pavel Sorokin said.

Uralsib analysts also expect the company to produce better results in July-September period.

The Europeans will try to buy more gas in the third quarter as the gas will be cheapest by then, and the heating season will be approaching, they said.

The row with Kiev over gas payments in January cut supplies to Europe, which receives about 20 percent of its gas from Russia via Ukraine. But quarterly revenues rose 2.2 percent to 931.4 billion roubles as higher prices offset the decline in volumes.

Gazprom said first-quarter profit was hit by the high cost of purchased gas, primarily from Central Asia, which contributed to costs rising 121 percent to 303.5 billion roubles. Total natural gas sales fell to 140 billion cubic metres.

FOREX WEIGHS

The company incurred a foreign exchange loss of 140 billion roubles due to a significant appreciation of the dollar against the rouble.

Rouble weakness also hit net debt, which rose 17 percent to 1.191 trillion roubles as of March 31.

Denis Borisov, an analyst with Solid brokerage, said the company was likely to incur smaller FX losses in the future due to the stabilisation of the rouble-dollar exchange rate.

I would also expect a recovery in exports, though the price will be somewhat lower, he said.

Gas prices follow those of oil with a six to nine-month lag, meaning prices are only now beginning to catch up with the lows plumbed by crude in January 2009.

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