Over the last decade, Gazprom has lost over 80% of its value and the status of the richest Russian company. Yet Putin believes that Gazprom is just hugely undervalued and will get back to its leading position soon.
The Russian president Vladimir Putin had an extensive interview with Bloomberg's Chief Editor John Micklethwait in Vladivostok last week. Among other topics, they discussed the position of Russia's energy giant Gazprom in today's market as the company has lost more than 80% of its value.
Micklethwait pointed out that over the last 10 years, Gazprom (MICEX: Gazprom [GAZP]) has moved from being one of the top 10 companies in the world to the 198th, yet Gazprom's management has never changed. Putin responded that Gazprom's CEO Alexey Miller is not to be doubted at his position.
Gazprom has been in the midst of crisis due to the increase of shale gas in the U.S., overall economic crisis in Russia and the crash in oil prices. However, Putin is quite positive about the company's performance and the future.
“Gazprom is clearly undervalued -- this is an absolutely obvious fact. We have no plans to sell it yet, and this is because of the peculiarities of the Russian economy, the social sphere and the Russian energy industry.”
Gazprom, with its 400,000+ employees and more than $1 trillion in revenue, has lost its status of the most expensive Russian company twice this year. First time in April to another energy giant Rosneft (LSE IOB: Rosneft [ROSN]), with a market cap of 3.7 trillion rubles, and last week to Sberbank (MICEX: Sberbank [SBER]).
However, Putin doesn't find Gazprom's situation alerting and calls Gazprom's current value "speculative". He said that under Miller's leadership, Gazprom didn't lose its market value but rather transferred it into the reserves that can be accessed and utilized at any moment.
Shortly after the interview was made public earlier today, Gazprom's stock grew by over 1%, currently trading at €3,72. This is the highest value the stock reached since August 23.
Overall, Putin seemed to be very optimistic about Gazprom's future:
“Despite the development of alternative energy, when you still look at the economic element and environmental standard demand, then there is no other source of primary energy in the world other than natural gas. There is a country that is, obviously, the world leader in gas reserves. That’s our country, the Russian Federation," he told Bloomberg.