INA announced the financial results for the first quarter of 2015

Key achievements

  • During the first three months of 2015, the INA Group EBITDA[1] amounted to HRK 707 million
  • There was a strong growth of domestic hydrocarbon production amounting to 20%, compared to the same period last year
  • The financial position of the company remains strong, with a further net debt reduction of 10%, compared to the first quarter of 2014
  • HRK 236 million were invested, 80% of which was invested in Croatia

Zagreb, 30 April 2015 – During the first three months of 2015, the INA Group EBITDA amounted to HRK 707 million, while the operating profit amounts to HRK 318 million, and the net profit amounts to HRK 50 million. During the subject period, the Company invested HRK 236 million, of which 189 million were invested in Croatia, and 47 million abroad.

The operative results of the company were significantly influenced by the halved price of Brent crude oil, as well as adverse regulatory measures; reduction in the regulated gas prices and a doubling of fees for the exploitation have had a negative impact on results in the amount of HRK 134 million compared to the first quarter of 2014. Nevertheless, the company’s financial position remained strong, with a further net debt reduction of 10% compared to the first quarter of 2014.

The Exploration and Production Business Division recorded an increase of 6% in the production of hydrocarbons, supported by a particularly strong increase in domestic production of crude oil by 20% compared to the first quarter of 2014, due to intense workovers and optimisation of production activities. The Division EBITDA amounts to HRK 870 million, while the overall result was under a negative impact of decreased crude oil prices and unfavourable regulatory decisions; the exploitation fees rate increased from 5% to 10%, starting from 26 March 2014, while the regulated natural gas prices for households decreased from 2, 2 HRK/m3 to 1.7 HRK/m3 since April 2014, resulting in a significantly lower average realised price of hydrocarbons. A further decrease to 1.6 HRK/m3 is in force, but it will have a negative impact on the result of the second quarter of 2015 onwards. Capital investments of the Division amounted to EUR 148 million; HRK 106 million was invested in Croatia, while the investment abroad amounted to HRK 42 million.

The Refining and Marketing Business Division (including Retail) recorded a clean CCS [2] EBITDA in the amount of HRK (53) million, which represents an improvement compared to the same period last year. The improvement is a result of improved operational efficiency in the retail business, as well as of improved sales structure combined with the effects of lower crude oil prices, thereby reducing the cost of own consumption and losses. Capital investments of the Refining and Marketing Business Division in the first quarter of 2015 amounted to HRK 27 million.

The operations of the Retail Business Division have improved, partly due to a halt of the decline in sales and the improved margins. The total sales volume amounted to 197 kt, registering an increase of 1% compared to the same period last year. Investments of the Retail Business Division reached HRK 11 million.

Mr. Zoltán Áldott, President of the INA Management Board, stated on this occasion that “in the first quarter of 2015, INA increased its oil production in Croatia by as much as 20% compared to the same period last year, thanks to the improvement of the wells efficiency and the development projects initiated in the previous years. At the same time, the results were burdened by a drastic drop in crude oil prices and the unfavourable regulatory changes in the domestic market, which affected the gas trade. Gas production in the same period showed a slight increase, while the sales of natural gas recorded a sharp decline due to reduced demand and the strengthening of competition.

Lower oil prices had a moderately positive effect on the refinery operations, but the overall result still remained negative. The refinery CCS EBITDA is recording significant progress, but it is still far from the profit achieved by the refineries with a more favourable structure of assets and products, which together with the declining environment of oil prices emphasises the need for optimisation of assets and continuous monitoring of costs. A slight increase in the quantities (by 1%) was recorded in Retail, as well as a shift towards premium fuels, influenced by lower fuel prices.

Maintaining a strong financial position enables the Company to continue with the implementation of investment programs and seek new opportunities for business development. The ratio of capital investments and EBITDA in the last 12 months amounts to 67%, which is generally in line with the long-term management plans.

Considering the highly volatile hydrocarbon prices, as well as the major changes in foreign exchange rates, the year 2015 will bring numerous challenges for the Company, nevertheless, the management remains committed to ensuring sustainable business and creating new values for shareholders”.Documents