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INA profit falls 68% on declining revenue, narrower margin

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Second-quarter net income of Croatiaʼs INA, a unit of Hungarian oil and gas company MOL, fell 68% to HRK 89 million (EUR 11.9 mln) from the same period a year earlier as revenue dropped and margins narrowed, an earnings report released today shows, according to Hungarian news agency MTI.

Revenue fell 33% to HRK 3.69 billion, while operating costs fell at a slower rate, declining 30% to HUF 3.68 bln, the report said. INA blamed the decline on "a deterioration of the external environment", namely a fall in the price of Brent crude that impacted gas prices, too.

In the report, INA chairman Zoltan Aldott acknowledged that 2016 had been and would be "marked by an adverse external environment … To tackle that challenge, [INA] is re-evaluating all projects and processes to enable a stable current position and future growth."

Revenue of INAʼs upstream business fell 33% to HRK 926 mln. Operating profit of the segment dropped 29% to HRK 332 mln.

Revenue of the downstream business slipped 30% to HRK 3.11 bln. Operating profit plunged 83% HRK 4 mln.

MOL holds 49.1% of INAʼs shares and exercises management rights in the company. The other big stakeholder in the company is the state of Croatia.

MOL is scheduled to release its Q2 earnings report on August 5.

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