In H1 2022, sales revenue increased by 68% YoY, EBITDA increased by 123%, while net profit amounted to HRK 1.54bn, an increase of over 1.8x YoY.
INA has published its H1 2022 results. According to the results, INA increased its sales revenue by 68% YoY in H1 2022, amounting to HRK 15.57bn during the first half of the year. The main drivers of these continuous strong results were the high prices of Brent oil, with levels above 100 USD per barrel, and CEGH gas price exceeding 100 EUR/MWh in Q2 2022 due to an ongoing increased geopolitical risk, turmoil, and uncertainty in the safety of supply.
The “Exploration and Production” grew by 90% from HRK 1.56bn in H1 2021 to HRK 2.96bn in H1 2022, making it the biggest contributor to the result. Higher prices impacted sales revenues positively by HRK 1.32bn. Increased gas prices added HRK 715m, while 66% higher Brent price brought an additional HRK 492m crude oil and condensate sales revenues with other products positive impact on revenues in the amount of HRK 109m.
Croatian production has decreased because of natural declines of onshore oil fields, higher water cut on major gas fields, and natural declines in major gas condensate fields in Deep Podravina. International production has declined in Egypt as well, however, it has increased in Angola due to an increase of INA share on Block 3/05 by 1.3%.
The “Refining and Marketing, including Consumer Services and Retail” grew by 69% from 8.97bn in H1 2021 to 15.19bn in H1 2022. Captive market sales have increased despite commercial margins being under pressure due to government price regulations on the domestic market. Refinery operations started at the end of March ensured stable captive market supply in the following months, mitigating the risk of lower product availability driven by the Russia-Ukraine crisis. Total Retail sales volumes grew by 9% YoY.
The Company’s EBITDA grew strongly by 123% YoY, amounting to HRK 2.77bn in H1 2022. “Exploration and Production” segment’s EBITDA grew by 127% from HRK 911m to HRK 2.07bn. Meanwhile, the “Refining and Marketing, including Consumer Services and Retail” grew by 109% YoY and amounted to HRK 1.11bn. Because of this growth in both segments, INA’s net profit increased strongly by 188% from HRK 534m in H1 2021 to HRK 1.54bn in H1 2022.
When it comes to investments, the Company increased its CAPEX significantly by 121% YoY, from HRK 609m to HRK 1.35bn. Nearly a billion was spent on “Refining and Marketing” to mitigate the trend of natural production decline. Rijeka Refinery Upgrade Project is now at ~56%. “Exploration and Production” also increased CAPEX levels, focusing on development activities both onshore and offshore in Croatia and Egypt.
Due to strong investment activities and unprecedented financing need for the working capital due to the global energy price levels, the Company’s cash flow reduced significantly from HRK 865m in H1 2021 to HRK -635m in H1 2022.
Outlook for Q3 2022 remains strong due to elevated levels of Brent and CEGH gas prices, ongoing uncertainty and turmoil with the Russia-Ukraine conflict, and the tourist season in full swing, under the premise that new regulatory measures don’t additionally impact the market.
INA key financials (H1 2021. vs. H1 2022, HRKm)
