During 2023, INA recorded a revenue decrease of 16% YoY, an EBITDA decline of 22%, and a net profit to majority of EUR 250m, a 1% decrease YoY.
Starting off with the net revenues, they amounted to EUR 3.89bn during 2023, decreasing by 16% YoY. This came mostly as a result of lower hydrocarbon prices, and product quotations. INA notes that after 2022, the global economy found its footing, marking a period of stability. Energy prices, which were quite erratic in 2022 have mostly steadied. This is visible in both the prices of oil and gas. The benchmark for oil, Brent oil, amounted to USD 83/one barrel (bbl) in 2023 on average, decreasing by 18% YoY. Furthermore, gas prices decreased even more significantly, from EUR 126/MWh to EUR 42/MWh, a decrease of 67% YoY.
Besides the decrease in energy commodity prices, INA also recorded lower production of crude oil, natural gas, and condensate, leading to overall lower hydrocarbon production. Crude oil production dropped by 6% YoY to an average of 11.6k barrels of oil per day (boe/d). This came due to lower production in Croatia, where it dropped by 4% YoY to 9.67k boe/d, but also more significantly, due to a 68% drop in Angola, to 180 boe/d. INA notes that production declined in line with the expected natural decline (Croatia) but also due to the divestment in Angola. For natural gas, a 7% decrease in production was recorded, both of which came from lower production in Croatia – offshore (-2% YoY) and Croatia – onshore (-9% YoY). Finally, condensate sales dropped by 11% YoY, mostly due to lower production in Croatia. All taken together, this meant that a 28% lower average hydrocarbon price was recorded.
Due to these reduced prices, EBITDA also decreased by 22% YoY to EUR 523m during 2023. Besides normal EBITDA, INA also reported EBITDA excl. special items, which decreased by 32% YoY to EUR 496m, as in 2022, the op. result was negatively impacted by impairment and reversal of impairment of asset in the amount of EUR 23.6m. Lastly, INA also reports CCS (current cost of supply) EBITDA excl. special items, which decreased by 30% YoY to EUR 536.3m.
In terms of operating expenses, they amounted to EUR 3.64bn during 2023, decreasing by 15%, or EUR 640m YoY. This came mostly as a result of the lower cost of raw materials and consumables, with a decrease of 25% YoY to EUR 1.29bn, as a result of different dynamics of refinery operation and lower price environment. The cost of other goods sold was also lower by 9% and amounted to EUR 1.58bn. Furthermore, other material costs were 25% lower and amounted to EUR 220.6m, mainly due to lower transportation costs and lower crude oil price impact. On the other hand, staff costs grew by 7% YoY to EUR 255.3m, as a result of inflation-driven salary corrections.
The net financial result was negative at EUR 31.9m, (2022: EUR -16.5m), mainly as a result of lower financial income (-36% YoY), while financial expenses increased by 7%. All taken together, this led to a net profit to majority of EUR 250m, a 1% decrease YoY. INA does note that the income tax expense was EUR 54.9m in 2023, as compared to EUR 156.2m in 2022, while including the extra profit tax on the Company, (in the amount of EUR 81.1m) in that period.
INA key financials (2023 vs. 2022, EURm)
Source: INA, InterCapital Research
In terms of CAPEX, in total it amounted to EUR 311m, decreasing by 14% YoY. Domestic CAPEX decreased by 14% as well, to EUR 293.5m, while international CAPEX declined by 9% YoY, to EUR 17.5m. INA notes that the lower CAPEX was primarily due to lower Croatia Offshore activities. In terms of the main CAPEX activities in 2023, these pertained to Croatian exploration: Drava-03: Veliki Rastovac-1 well, Drava-03, Obradovci-1J well, and Mikleuš-1 well. Croatia offshore: Ivana D decommissioning project. Croatia onshore: Production optimization: 58 well workovers performed. Finally, several developments in Egypt.
If you would like to read the entire report, click here.
