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INA: net sales revenues increase by 20% in 2018

Key achievements

  • INA Group’s EBITDA amounted to HRK 3,489 million, 3% more than in 2017
  • Net sales revenues increased by 20% and amounted to HRK 22,349 million
  • CAPEX amounted to HRK 1,817 million, 30% more than in 2017
  • Operating cash flow increased by 10%

Zagreb, February 21, 2019 – In 2018, INA Group net sales revenues increased by 20% compared to 2017. The positive result was driven by growth in all segments, utilizing higher hydrocarbon price and sales. At the same time, EBITDA remained at the last year level, with CCS EBITDA excluding special items of HRK 3,116 million. Profit from operations increased by 19% compared to 2017 and amounted to HRK 1,687 million.

Exploration and Production EBITDA excluding special items grew by 23% to HRK 3,014 million, with significantly higher realized hydrocarbon price which compensated the mature structure of assets and 7% decrease in hydrocarbon production. CCS EBITDA of Refining and Marketing including Retail excluding special items was at HRK 286 million in 2018, which is HRK 581 million lower compared to 2017, with negative simplified free cash flow of the segment amounting to HRK (784) million, underlining the need for the execution of the INA Downstream 2023 New Course program.

Compared to 2017, CAPEX increased by 30% to the level of HRK 1,817 million. Net gearing remained low at 12.2% with year-end net debt at HRK 1,642 million.

Statement of Mr. Sándor Fasimon, President of the Management Board of INA:
“Following the 2017, as a record year for INA’s dividend in recent years, INA Group in 2018 once again achieved a very strong result. INA utilized the market conditions and increased both its sales and EBITDA, revenues growing over the strong 2017 result by further 20%, to the level of over HRK 22 billion.
Upstream, as the main cash generator of the company, benefited from the increased Brent price as well as growth projects. EBITDA of the segment exceeded HRK 3 bln, 22% up from 2017 result. INA’s purchase of ENI’s share in the Northern Adriatic offshore gas fields was the biggest M&A in recent years, demonstrating focus in investments where return can be achieved. Still, the period of favorable Upstream environment should not be taken for granted and long term sustainability of all businesses needs to be ensured. Natural decline of the production remains a challenge due to the maturity of INA upstream assets, however multiple projects aimed at addressing this are underway.
Downstream operations remain burdened with the negative cash generation of Refining operations. Nevertheless, increase in CAPEX spending shows INA commitment on maintaining vertically integrated business model. INA Group CAPEX spending increased by 30%, majority of which in Refining, mostly focused on Propane-Propylene Splitter project in Rijeka as well as other refining development projects. Retail operations stay focused on expanding the portfolio of goods and services offered to customers, together with regional expansion. Increase of Montenegro network in 2018 is an evidence of INA’s future focus in regional markets, while constant growth of non-fuel margin demonstrates the viability of non-fuel related investments.
2019 is expected to witness further company investments alongside with the comprehensive INA Downstream 2023 New Course program implementation, aimed to ensure the long term future of sustainable and profitable operations.”Priloženi dokument