INA reports 64% fall in profit


Croatian oil and gas company INA — a subsidiary of Hungarian peer MOL —posted net profit excluding special items of HRK 344 mln for 2014 on the week-end, 64% less from the previous year.

Net loss attributable to shareholders came in at HRK 1.9 bln, 26% more than the loss accounted for in 2013.

Operating profit without special items shrank 36% to HRK 523 mln, while the same accounted at current cost of supplies (CCS) increased 15% to HRK 1.16 bln.

EBITDA, excluding special items, fell 29% to HRK 2.7 bln, and CCS EBITDA, without special items, decreased 16% to HRK 3.33 bln.

Reported operating results were impacted by a significant drop of Brent prices, by further impairment of Syrian assets of HRK 1.6 bln, and HRK 395 mln impairment in the downstream segment. Retroactive refinery taxes for 2010 and 2011 burdened the results with additional HRK 325 mln in 2014, the statement said.

Negative regulatory decisions had a significant and ongoing negative effect on upstream operations. The combined effect of forced gas sale, regulated gas price reduction and doubled royalty as well as another subsequent refinery tax obligation on the result reached almost HRK 1.1 bln. Consequently realized hydrocarbon prices decreased and were also influenced by considerable Brent price drop in the second half of the year.

Constant efforts of Exploration & Production in compensating the natural decline have resulted in a crude oil production increase, for the first time in more than a decade, with a 5% improvement compared to 2013. This increase was however not enough to compensate for the drop in gas production of 8%, bringing the total production to a 4% decrease, the company said.

The financial position of INA improved as net debt stood at HRK 2.99 bln at the end of last year, 37% less than a year ago. Net financial expenses increased by 137% to HRK 622 mln.

Capital expenditure totaled HRK 1.69 bln, 16% less than in 2013, focused mainly in Croatia, primarily in the upstream segment.

Net sales dipped 13% to HRK 23.76 bln.

In the fourth quarter of last year, INA's net loss excluding special items was HRK 239 instead of the HRK 464 profit a year earlier.

Net loss attributable to shareholders increased 31% to HRK 2.5 bln.

EBITDA, excluding special items, was HRK 320 mln, a 62% drop, and the same accounted at CCS deceased 15% to HRK 741 mln.

Net sales fell 27% to HRK 4.9 bln compared to the last quarter of 2013.

Croatia, which owns 44.84% of the Zagreb-based INA, has tried since 2011 to regain some management rights in INA that MOL received as part of a 2009 shareholders agreement, which has given it a 49.08% stake in INA. The three-year clash over the Croatian company has included mutual arbitration suits over management rights and the Croatian government's alleged breaches of contract, a Croatian Supreme Court bribery verdict against Croatia's former premier Ivo Sanader for his role in INA's sale, and charges of bribery in a Croatian court against MOL Chairman Zsolt Hernádi, which he denies.

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