The Kremlin-owned gas company Gazprom has plunged to its first annual loss in more than 20 years, after gas sales more than halved following Vladimir Putin’s invasion of Ukraine.

The company made a net loss of 629bn roubles (£5.5bn) in 2023 amid dwindling gas trade with Europe, once Gazprom’s main sales market, as a result of sanctions and the throttling of pipelines to the continent.

The results highlight the dramatic decline of the company, which since the collapse of the Soviet Union has been one of Russia’s most powerful, with its gas supplies often used as a leverage in disputes with neighbours such as Ukraine and Moldova.

Analysts had expected net income of 447bn roubles, according to the Interfax news agency. According to analysis by Reuters, it was Gazprom’s first annual loss since the late 1990s/early 2000s, when Alexei Miller, an ally of the then newly installed President Putin, took over the company in 2001.

Gazprom’s 2023 loss followed a net profit of 1.2tn roubles the previous year.

The company, which is now headquartered in St Petersburg, made heavy losses in the late 1990s after it racked up foreign-currency debt, inflated in rouble terms by the financial crisis of 1998. Gazprom shares in Moscow were down about 4% on Thursday.

Russia’s gas exports to Europe, once its primary export market, have slumped because of the political fallout from the conflict in Ukraine, while Gazprom, which has a monopoly on piping gas abroad, has been the most tangible victim of western sanctions.

In mid-2022, Gazprom began throttling supplies of gas to Europe through its Nord Stream 1 pipeline, and that September announced it was indefinitely shutting down the conduit from Siberia into northern Germany via the Baltic Sea. The following month the pipeline was damaged by undersea explosions, the cause of which is still being looked into by German investigators.

While the disruption pushed the whole gas price up to near-record highs, European countries had greater success than expected in finding alternative sources of supplies, with the US and Qatar helping to refill storage on the continent.

Gazprom’s core profit, or earnings before interest, taxes, depreciation and amortisation (Ebitda), fell to 618.38bn roubles last year, down from 2.79tn roubles in 2022, according to Reuters’ calculations.

Ronald Smith from the Moscow-based brokerage BCS Global Markets said: “The full-year Ebitda of $7.2bn was the worst in 22 years, since the company reported $7.6bn in 2002.”

According to Reuters’ calculations, Gazprom’s natural gas supplies to Europe fell 55.6% to 28.3bn cubic metres (bcm) last year. Gazprom has not published its own export statistics since the start of 2023.