In 2019, INA recorded an increase in sales of 1%, a a decrease in EBITDA of 18% and a decrease in net profit of 58%.
Ina published their preliminary FY 2019 results. According to the report, INA recorded sales of HRK 22.6bn, showing a slight increase of 1% YoY. The mentioned increase came mainly on the back of higher wholesale, lack of supply from Bosanski Brod Refinery and sales growth on captive market.
Meanwhile, operating expenses amounted to HRK 22.57bn, representing an increase of 4% YoY. Such an increase could be attributed mostly to higher cost of goods sold (+97%), resulting from higher import of goods to meet market demand. Such an increase was partially offset by lower costs of raw materials and consumables (-30%), resulting mainly from lower processing triggered by Rijeka Refinery turnaround from January until May.
CCS EBITDA excluding special items came in at HRK 2.9bn in 2019, a decrease of 7% compared to 2018, mainly due to the 10% decline in Brent crude price.
Exploration and Production revenues and EBITDA excluding special items decreased in 2019 by 11% and 22% respectively, on the back of 9% lower realized hydrocarbon prices and a 3% decline in hydrocarbon production.
Overall production volumes were supported by higher crude oil production in Egypt, which was more than offset by the natural decline on Croatian fields, especially on gas fields. Refining and Marketing including Consumer Services and Retail CCS EBITDA excluding special items amounted to HRK 557m in 2019, increasing by HRK 271m year-on-year, while Simplified Free Cash Flow of the segment was negative HRK 779m in 2019 due to the negative Refining and Marketing cash flow.
In 2019, INA recorded a negative net result from financial activities of HRK -76m, which is an improvement of HRK 91m as a result of a lower net FX loss and lower interest payables compared to 2018.
In 2019, INA’s net profit amounted to HRK 489m, representing a decrease of 58%. When observing solely Q4, INA recorded a net loss of HRK 192m, compared to HRK 120m in Q4 2018.
The main events of the year for Refining included a large-scale turnaround completed in May and also the final investment decision on Rijeka Refinery Upgrade Project, the largest investment in the recent history of INA. At the same time sales were stable, utilizing market conditions. Higher retail volumes (+ 3%) resulted from the improving performance in Croatia and the network expansion in Montenegro.
Turning our attention to CAPEX, in 2019 investments were higher by 18% YoY, amounting to HRK 2.15bn, with increased investments in Refining and Marketing. Net gearing amounted to 18.5% with net debt standing at HRK 2.55bn at the end of 2019.
