INA Group results reflected improvement in external environment
- In H1 2021 external environment recovered, having a positive effect on INA Group results, but 2020 pandemic impact is still present.
- Exploration & Production again became company’s biggest cash generator, although natural production decline continues.
- Strategic investments such as the Rijeka Refinery Upgrade Project continue to move forward, while the capital investments in Refining and Marketing amount for more than half of total INA investments.
- Key achievements:
- Net sales revenues amounted to HRK 9,270 million
- Profit amounted to HRK 534 million
- EBITDA amounted to HRK 1,239 million
- CAPEX amounted to HRK 609 million
- Simplified Free Cash Flow amounted to HRK 448 million
Zagreb, July 28, 2021 – Second quarter of 2021 has shown further improvement in external environment, with Brent prices well above USD 60 per barrel and CEGH gas price at 24 EUR per MWh. Product demand has increased close to pre-crisis levels in our core region, however the COVID-19 pandemic is not over yet, therefore economic recovery remains still fragile.
EBITDA of INA Group surpassed HRK 1.2 billion while profit for the first half of 2021 amounted to HRK 534 million. Exploration and Production segment benefited strongly from the higher hydrocarbon prices and increased its EBITDA contribution by 64% to HRK 911 million, despite 11% lower production caused mainly by natural decline. Refining and Marketing including Consumer Services and Retail also benefited from the increased crude and product prices through positive inventory revaluation. Retail contribution remained strong as sales volumes increased by 11%, in line with the easing of travel restrictions and general market recovery, while non-fuel segment also shows constant growth.
Investment activities increased in all segments compared to H1 2020, strategic investments also continued with Rijeka Refinery Upgrade being the main project. Net profit impacted by received dividends from OMV Slovenia in the amount of HRK 160 million accumulated over the years, which all resulted in strong financial position, with low debt level of HRK 2,011 million and net gearing of 16.9%.
Statement of Mr. Sándor Fasimon, President of the Management Board of INA:
“2021 continues to show a more optimistic forward-looking environment, which is no surprise after unseen difficulties that 2020 brought to the world economy. Recovery of oil & gas prices, with Brent prices even exceeding USD 70 in short periods, is a welcome sign not just for INA, but for the entire oil & gas industry. Increase in INA revenues of 31% is a strong result, although this is still not up to the pre-crisis, first half 2019-level.
In such environment, Exploration & Production again took the position of the biggest cash generator, but we should not overlook that this return is driven by external factors. Continued trend of decreased production and mature portfolio of assets remain present challenge for Exploration & Production operations and continued efforts are needed in order to maintain its strong position.
Refining result also benefited from the increased price levels, although the COVID-19 pandemic still poses risk for future demand through the general economy outlook. Therefore, we must remain prepared for quick reactions should the market once again become more volatile. Strategic project of Rijeka Refinery Upgrade is ongoing, while the capital investments in Refining and Marketing amount for more than half of total INA investments.
End of second quarter showed the usual rise in Retail sales, related to better than expected tourist season, however at this moment it is hard to give any forward-looking estimate. The third quarter will show the full result of the increased consumption and give us a better estimate of the total 2021.”