INA published financial results for the first quarter of 2013

Zagreb, April 30- INA – Industrija nafte, d.d. has published financial results of INA Group for the first quarter of 2013.

In the first three months of 2013, INA Group recorded positive results in both operating profit and net profit, which amounted to HRK 549 million and HRK 376 million, respectively. Improved operative efficiency, reflected in the reduced operating expenses, made a strong contribution to the result.

INA Group’s revenues remained at the approximately same level of HRK 7 billion with 25% increased exports. In the first three months the Company maintained the production level of refined products, in spite of the dropping domestic demand. Increasing export to BH, Slovenia, and other markets made up more than half of refined products sale, strongly underlined by decreased import of final products. At the level of above HRK 1 billion, EBITDA was decreased when compared to the first three months of 2012, which was influenced by production decrease caused by the natural decline in production of hydrocarbons and pressures from the Refining and Marketing Segment due to the decrease in demand and slightly decreased refinery margin.

Commenting on the financial results, INA MB President Zoltán Áldott said “INA Group’s environment in the first quarter of 2013 remained challenging and negative movements from 2012 continued into 2013, but the Company achieved stable positive results.” He emphasized that management’s continued efforts for efficiency improvement and cost control “become more and more important as prolonged economic slowdown in Croatia and the rest of INA’s core region continues to limit performance.” Áldott further said “After successfully completing INA’s 3-year efficiency improvement program (OptINA2), we have continued with further efficiency improvement actions on a business-by-business basis, with a primary focus on downstream. Results of these activities are visible in, among other aspects, a 20% decrease in other material and service costs.

Exploration and production was positively influenced by higher realized prices and lower import gas volumes but the total result was moderated by natural production decline. Refining operations in whole Europe continue to be burdened by volatile crack spreads and depressed demand leading to closure of a number of plants. Croatia has also witnessed another difficult quarter in terms of fuel demand but INA managed to more than counter-balance the drop in domestic demand by intensifying sales activities in other markets, resulting in the increase of exports by one fourth.

CAPEX spending was focused on domestic projects, especially onshore exploration, where, while continuing our EOR projects, preparation for three new exploration wells was completed. INA’s two refineries are jointly supplying the Croatian and the regional market and further system development is primarily oriented in the HSE and efficiency improvement areas in order to maximize synergies between refineries and increase the depth of conversion resulting in a better product yield. Large scale retail network modernization carried out in 2012 and continuing in 2013 resulted in INA having the largest number of modernized petrol stations in Croatia and ensured INA’s position as leading premium retailer in Croatia,” INA MB President concluded.Documents