Despite the challenges, INA’s financial position remains robust
- In terms of external environment, the first half of 2023 was marked by stabilization of oil price, decline in gas prices and continuation of regulatory constraints, which had a negative impact on H1 2023 result.
- In line with the reduced prices, EBITDA of Exploration and Production declined by 22%, still staying rather strong with EUR 214 million in first half of 2023. Natural decline of production amounted to only 3%, which is a good result taking into consideration the portfolio maturity.
- Refining and Marketing incl. Consumer services and Retail segment result remains negatively impacted by adverse margin environment, although the sales on captive markets stayed strong.
- Investment activities resulted in EUR 218 million spending, out of which EUR 85 million is related to acquisition of 25.25% share in OMV Slovenija d.o.o., increasing INA’s share to 33%, in addition to EUR 132 million of Capital Expenditures (CAPEX). Rijeka Refinery Upgrade Project, which reached 78% completion in H1 2023, remained in the focus of CAPEX.
- Financial position remains robust with net debt almost unchanged compared to the same period last year.
Key figures:
- Net sales revenues amounted to EUR 1.7 bln
- CCS EBITDA amounted to EUR 163.6 mln
- Investments amounted to EUR 218 mln
Zagreb, 28 July 2023 – Continuation of 2023 brings stabilization of oil price and sharp decline in gas prices in H1 compared to the same period of 2022. The average realized hydrocarbon prices are reduced by 23%, which together with decreasing product price environment pushed the result down. After 2022, which was an extraordinary year for entire oil and gas industry, the first half of 2023 saw a mildening of price shocks, with INA achieving EBIDTA in the amount of EUR 183 million.
In line with the reduced prices, EBITDA of Exploration and Production declined by 22%, still staying rather strong with EUR 214 million in first half of 2023. Natural decline of production amounted to only 3%, which is a good result taking into consideration the portfolio maturity. The moderation of the expected natural decline comes mainly from offshore contribution and increased Egyptian production due to the newly drilled wells.
Refining and Marketing incl. Consumer services and Retail segment result remains negatively impacted by adverse margin environment, although the sales on captive markets stayed strong. After finalisation of brownfield part of Rijeka Refinery Upgrade Project and temporary shutdown of refining activities, Rijeka Refinery successfully started production at the end of April. Despite the continued fuel price regulation in Retail, strong growth of Retail volumes (+22% compared to H1 2022) and increase in non-fuel margin helped to partially compensate the lower result of Refining and Marketing.
Investment activities resulted in EUR 218 million spending, out of which EUR 85 million is related to acquisition of 25.25% share in OMV Slovenija d.o.o., increasing INA’s share to 33%. Continuation of the Rijeka Refinery Upgrade Project remained the focus of the CAPEX with EUR 132 million. Financial position remains robust with net debt almost unchanged compared to the same period last year.
Statement of Zsuzsanna Ortutay, President of the Management Board of INA:
“2023 continues to be an active year for INA. Intensive investment period in the Refining and Marketing segment continues, with Rijeka Refinery Upgrade Project reaching 78% completion. Following the successful finalisation of investments in the brownfield part of RRUP, an important milestone in the project, Rijeka Refinery started processing at the end of April.
Significant changes in portfolio were also made during Q2 2023. Petrokemija has been divested, while INA strengthened its share on the Slovenian market with the increase of its share in OMV Slovenija to 33%. This transaction ensured a long-term market for Rijeka Refinery products.
In Exploration and Production, natural decline is currently moderated at around 3%, while further streamlining of the portfolio was made with by completing Angola and Egypt East Yidma divestments. INA will continue with the investments in Exploration and Production with the intention of further increasing the security of energy supply for Croatia. Furthermore, it should be noted that with the normalization of the macro environment, extra profits from 2022 are not likely to repeat.
Refining and Marketing incl. Consumer Services and Retail segment operations remained cash negative due to deteriorated margin environment and fuel margin cap, which is still in force. Nevertheless, increased Retail sales volumes and constant increase in non-fuel margin positively assisted the result.”