Panenić: Ina’s Loss Due to Falling Oil Prices, We Expect Investments in Refineries

Minister of Economy Tomislav Panenić assessed on Wednesday that Ina reported a significant loss last year primarily due to the drastic drop in crude oil prices, but also noted that operations in the refinery segment are significantly better than in previous years, aided by oil processing in both Croatian refineries, and that he expects new investments in our refineries.

The minister emphasized in a statement that Ina, “like other oil companies, including BP, Shell, ExxonMobil, OMV, MOL…, reported a significant loss in its annual reports for 2015, primarily due to the drastic drop in crude oil prices compared to 2014.”

“However, we observe that the operations of the Refinery segment are significantly better than in previous years, aided by oil processing in both refineries in the Republic of Croatia. Given that at the MOL level, the 39 percent increase in oil processing compensated for losses in crude oil production, we expect new investments in our refineries. We will continue to carefully monitor how Ina behaves in this low oil price environment and how it will contribute to the growth of Croatian GDP through its business system,” Minister Panenić stated.

Ina announced today that the Ina Group achieved sales revenues of 18.86 billion kuna in 2015, which is 21 percent less than the previous year, while net profit, excluding one-off items, fell by 83 percent to 58 million kuna.

However, when one-off items are taken into account, the Ina Group operated at a loss of 1.42 billion kuna, which is a 25 percent smaller loss than in 2014. This result was influenced by special items totaling 1.476 billion kuna, with the largest portion of these one-off items relating to the impairment of assets in the Exploration and Production segment, due to the weakening of oil prices and the ongoing Syrian crisis, Ina stated.

The CEO of Ina, Zoltan Aldott, assessed that the company managed to achieve a solid result in 2015, given the unfavorable global market situation.

Aldott specifically highlighted in a statement to journalists that Ina’s adjusted EBITDA for 2015 increased by about nine percent year-on-year to 3.7 billion kuna.

Ina’s investments last year amounted to more than 1.6 billion kuna, which is only 2 percent less than in 2014.

In 2016, according to Aldott, there should be a certain decline in Ina’s investments. This year, depending on the situation in the oil and gas market, a continuation of strategic investments is expected, and possibly a withdrawal from smaller ones, Aldott added, stating that investments between 1.3 and 1.6 billion kuna can be expected.

Regarding refinery operations, Aldott said that Ina has prepared an investment project in Rijeka, which, he said, could align with the new government’s goals of initiating an investment cycle, as it involves an investment of over 400 million euros.

The financial report for the past year was also published by the largest individual shareholder of Ina, Hungarian MOL, which achieved a net CCS EBITDA profit of 2.5 billion dollars last year, 13 percent more than the previous year, primarily due to a record financial result in refinery operations.

In refinery operations, or ‘downstream’, MOL states that it achieved “the historically strongest financial result.” In this segment, the MOL Group achieved a net CCS EBITDA profit of 1.65 billion dollars, which is more than double the results from the previous year.