INA reported today a 24 percent increase in sales revenue for the first nine months of this year and a 51.16 percent decrease in net profit, primarily due to negative exchange rate differences.
According to the financial report submitted to the Zagreb Stock Exchange, sales revenue reached 22.27 billion kuna during this period. EBITDA amounted to 2.44 billion kuna, which is 20.5 percent higher than in the first nine months of last year. "Despite this growth, net profit decreased to 355 million kuna due to financial losses, primarily from negative exchange rate differences resulting from the rise of the US dollar in the third quarter of 2008. In the first nine months of this year, we invested more than 2.8 billion kuna, most of which went into the refinery modernization program, where the second phase of modernization began at the RN Sisak, as well as in the Northern Adriatic and Syria projects. Investments increased by 1.3 billion kuna compared to the first nine months of 2007," commented Tomislav Dragičević, CEO of INA.
As the main features of the core activities during the observed period, Dragičević highlights increased oil and natural gas production abroad, a leading position in the main wholesale markets of the INA Group, and an increase in the number of gas stations. The profit from the core activities of the INA Group for the period I-IX.2008 amounts to 890 million kuna (187 million USD) and has increased by 11 million kuna compared to the same period in 2007. The favorable result due to higher oil prices and increased external oil sales outside Croatia was diminished by the impact of the "price cap" and the adverse effect of reduced hydrocarbon production, as well as lower production and sales of oil derivatives, the statement further notes.
The profit from the core activities of oil and gas exploration and production increased in the period I-IX.2008 by 314 million kuna, reaching 1.703 billion kuna (358 million USD). The positive effect of higher crude oil prices (the increase in BRENT FOB was 65.5 percent) was partially offset by lower daily hydrocarbon production (primarily due to reduced natural gas production in the northern Adriatic fields in accordance with the Production Sharing Agreement) along with increased production cost, losses from the sale of imported natural gas (higher quantities and higher import prices), and higher costs for the Crosco Group due to the mismatch of revenue and cost dynamics (preparation and transport of drilling rigs to a new location), the statement further notes.
In the third quarter of 2008, the profit from core activities was higher by 81 million kuna compared to the same period in 2007, primarily due to higher oil prices offset by greater losses on sold imported natural gas (due to the increase in the negative difference between selling and import prices). The Refining and Marketing segment in the period I-IX.2008 recorded a loss from core activities of 99 million kuna (21 million USD), which is a 186 million kuna unfavorable result compared to the same period last year. This is a consequence of less favorable production yields, lower oil processing and sales volumes, and an increased negative effect of the retained "price cap" on the domestic market of 56 million kuna, along with the negative impact of regulated prices of LPG in the mentioned period of 294 million kuna (activities have been initiated to draft regulations that will govern the formation of LPG prices).
