Better days coming for the Croatian national oil company?
INA’s net profits in the first six months of the year, excluding non-recurring items, amounted to 609 million kuna, which is the best result of the Croatian oil company since 2011 and a much better result than last year when profits amounted to only 70 million kunas. The revenue in the refinery and retail sector grew by as much as 24 percent, reports Večernji List on 28 July 2017.
INA group’s sales totalled 8.41 billion kunas, which is 34 percent more than in the same period last year and was primarily a result of higher revenues from the research and production, refining and marketing sector, which including retail trade. Income from this segment jumped from 5 billion kunas to 7.2 billion kunas.
Nevertheless, INA’s CEO Zoltan Aldott pointed out that the refinery in Sisak created a loss of almost 170 million kunas during this period. “The solution for the future of the Sisak refinery can be found in joint strategic efforts and negotiations with the government, as well as with other shareholders and local stakeholders. The underlying problem is that the market is significantly smaller than a decade ago; we have too much capacity so we must focus our business activities and investments on one refinery which can be strong in the new environment, given that the consumption of classic fossil fuels is falling,” said Aldott and adding that INA has been preparing significant investment in the refinery in Rijeka for years.
The modernization plan for the Rijeka refinery is valued at about 400 million euros, which should improve the sales structure, with a 35-40 percent growth in production. The company is in the phase of a preparatory project that will conclude at the end of this year, followed by the project approval phase. The better international environment has been able to offset a drop in production by 4 percent in the research and production sector, resulting in an EBITDA growth of 26 percent compared to the first half of 2016.
Crude oil production in Croatia is stable, while domestic land-based production of gas grew by 6 percent compared to the first half of 2016. Capital investments, which were significantly affected by a different schedule of investments within the business year, amounted to 520 million kunas. A more intensive investment campaign is expected in the second half of this year.
“The first half of the year showed a remarkable growth in INA’s results in all activities,” said Aldott, pointing out that INA was at the lowest level of indebtedness recorded in the last ten years. The debt to capital ratio was 15.3 percent, while in the same period last year it stood at 24.2 percent, while the debt in absolute terms was reduced from 3.37 billion kunas to just over 2 billion kunas.
“This should be a good moment for INA to ensure the ability to finance all strategic projects in the upcoming period,” said Aldott, announcing further strengthening of the company’s market position and activities, given that long-term forecasts are difficult to make and market volatility is always a threat.
Translated from Večernji List.
