Financial Results Q1 2021

Source Press Release
Company INA Group 
Tags Refinery Project, Refining & Marketing Activities, Production/Development, Exploration, Upstream Activities, Strategy - Upstream, Capital Spending, Financial & Operating Data, Strategy - Corporate
Date April 29, 2021

INA Group remains financially stable in the slowly recovering environment

  • After a most challenging 2020, in Q1 2021 hydrocarbon prices recovered and COVID-19 restrictions were somewhat eased, having a positive effect on INA Group results, but still not allowing a relaxed approach to business.
  • Thanks to timely financial and operational measures strategic investments such as the Residue Upgrade Project in Rijeka Refinery move forward.
  • INA entered a new concession in Egypt.
  • Key achievements:
  • Net sales revenues amounted to HRK 3,953 million
  • EBITDA amounted to HRK 467 million
  • CAPEX amounted to HRK 228 million
  • Simplified Free Cash Flow amounted to HRK 216 million

Zagreb, April 29, 2021 – The beginning of 2021 was marked by a more favorable external environment compared to 2020, which was one of the most challenging years for oil & gas industry. Although the world economy is still far from recovery and demand is limited, the impact of gradual easing of COVID-19 restrictions is visible.

EBITDA reached HRK 467 million and Profit for the period amounted to HRK 50 million, in contrast with the losses in 2020 caused by a large drop in hydrocarbon prices and consequent negative inventory revaluation. Exploration and Production benefited from the increased hydrocarbon prices but expected natural decline continued with production level below 28 th boe/d, 12% lower compared to Q1 2020. This drove the business’ EBITDA to HRK 401 million, 5% lower compared to Q1 2020. In Q1 2021, INA entered a new concession in Egypt, following efforts to partly compensate for the natural decline of production on domestic fields. Refining and Marketing incl. Consumer services and Retail reached CCS EBITDA of HRK 138 million in Q1 2021. Despite the 3% lower fuel demand, Retail contribution remained strong.

Investment activities were 17% higher compared to Q1 2020. Strategic investments continue with Rijeka Refinery Upgrade as the main project while constant financial discipline throughout the crisis resulted in stable net debt of HRK 2,723 million.

Statement of Mr. Sándor Fasimon, President of the Management Board of INA:

“After the year 2020, marked by an unseen crisis in the oil & gas industry, the start of 2021 shows some signs of segment recovery, although it is certain that the industry will not return to its previous power soon. Brent prices moved around USD 50 during Q1 2021 which positively affected the result, but doesn’t allow for a laid-back approach to operations. INA Group, with its timely reaction to crisis, managed to keep a stable financial position and ensured continuity in implementing strategic projects.

Q1 2021 Exploration & Production operations have seen a continued trend of decreased production, something that is expected given the mature structure of INA fields, which was partially offset with the mentioned increase in prices. On the other hand, a new transaction in Egypt, Block 10 concession area, was finalized which will allow for some upside in future production.

Refining operations have been adjusted to demand during 2020, with profitable import ensuring stable market supply, but with the relative easing of COVID-19 restrictions and some optimism in the macroenvironment, domestic processing started at the end of the first quarter. Retail sales volumes are roughly at previous year level, while non-fuel margin records a steady and strong growth.

Any forward-looking statements in an environment still burdened by pandemic restrictions are hard to make, but INA can and will work on its internal actions, including continuation of strategic projects as well as adjusting its operations quickly to any market development, to ensure stable cash generation in the future.”

Source: EvaluateEnergy® ©2022 EvaluateEnergy Ltd