INA achieved strong results in Q1 2017
Zagreb, April 27, 2017 – INA Group achieved strong results in Q1 2017, with EBITDA reaching HRK 607 million, an almost six-fold increase compared to the corresponding period of last year. The external environment, mainly in the form of recovering Brent prices, was the main driver behind the positive change in earnings.
- INA Group’s EBITDA amounted to HRK 607 million, 495% above the level in Q1 2016, while net profit amounted to HRK 199 million
- Stable financial position of the Company
- CAPEX amounted to HRK 209 million
- Domestic crude production remains stable, while domestic gas production onshore went up by 13% in relation to Q1 2016
- Refinery production increased by as much as 84%, and refined product sales grew by 37%
Constant efficiency efforts and continuous adjustments to operations given the market dynamics further contributed to the positive results. Consequently, Exploration & Production performance improved significantly with an EBITDA increase of 18%, to the level of HRK 635 million. On the other hand, mainly on the back of inventory gains, Refining & Marketing incl. Retail EBITDA reached HRK 149 million for the quarter, a moderately positive result given the favourable refining environment. Nevertheless, the increase in sales volumes on captive markets is a reflection of an overall macroeconomic improvement. Finally, a stable increase in non-fuel revenues contributed to the growth in the profitability of R&M incl. Retail operations.
CAPEX amounted to HRK 209 million, however, a more intensive investment campaign is expected in the second half of 2017. Revenue growth contributed to keeping the financial position of the Company stable. Net gearing increased slightly compared to end of 2016, to 20.8%, whilst net debt reached HRK 2,824 million, a 13% increase compared to 2016 closing.
President of the Management Board of INA Mr. Zoltán Áldott said: “For INA, 2017 started strongly, showing optimism driven by actions taken last year to keep our financial position stable and to improve business performance. Additionally, increase in Brent prices gave a boost to INA operations, especially in Upstream. All these factors combined led to almost HRK 200 million net profit in just one quarter, with a safe balance sheet capable to finance significant investments planned for the next few years.
We are on good track with our ongoing projects as well: EOR project is continuing to Žutica field, while the design phase of the Rijeka Residue Upgrade Project is progressing as planned.
Upstream could not avoid the natural decline, stronger in the offshore fields, but this was greatly offset by the production from new Međimurje fields. Also, the natural gas sales show a moderate growth compared to Q1 2016, while the long awaited liberalization started to drive the market on a more sustainable level.
Refining and Marketing including Retail had a quarter of favorable refining margins and no turnovers were performed on main assets, which resulted in almost doubled processing. Sales also grew on all markets, adding to the results, while non-fuel sales continue to grow, backed with continuous expansion of products and services offered at retail sites. Nevertheless, it is no time to relax, having in mind INA’s refining operations still require restructuring to make the operations cash positive.”
EBITDA = EBIT + Depreciation + Impairment + Provisions