(Bloomberg) -- Russia’s state-controlled gas giant reported its first annual net loss since 1999 on falling shipments to Europe and lower prices for the fuel. 

Gazprom Group, which also includes oil and power businesses, posted a 629 billion-ruble ($6.84 billion) loss last year compared with net income of 1.23 trillion rubles in 2022, according to an earnings report published Thursday. 

The energy company’s shares fell as much as 4.4%, the steepest decline in more than a year, amid market concerns over its dividend prospects. Gazprom’s biggest shareholder is the Russian government, whose budget is under pressure amid rising military spending and Western sanctions. 

The net loss follows restricted gas flows to Europe — historically Gazprom’s biggest market — amid the Kremlin’s retaliation for Western support of Ukraine after Russia’s invasion in 2022. Meanwhile, plunging gas prices amid mild weather, sluggish demand and brimming inventories contributed to Gazprom’s loss.

Revenue from gas fell by 40% to 4.88 trillion rubles, according the report. While Gazprom continues to ship pipeline gas to several European countries, last year its flows to Europe fell to the lowest since the early 1970s, according to International Energy Agency estimates. 

READ: Russia Forecasts Lower Price for Its Gas to China Versus Europe

This year Russia expects its gas shipments via pipelines to foreign markets will increase 18% this year to 108 billion cubic meters compared with 2023, as the Power of Siberia link to China gradually reaches its nameplate capacity. But even as more supplies head to China, it can’t offset the loss of the European market. 

Revenue from the group’s oil business rose by 6.7% to 3.88 trillion rubles last year, while sales at its power utilities business increased by 8.8% to 617 billion rubles. 

Gazprom Group’s investments are planned at 2.57 trillion rubles this year, according to the report. That’s down by almost 16% from its plans for 2023. 

(Updates with investment plans in the last paragraph. An earlier version was corrected to say first loss in 24 years.)

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