In Q1, INA recorded a decrease in sales of 7.1%, a decrease of CCS EBITDA of -14% and a net loss of HRK 798m.

INA has witnessed unprecedented market dynamics in Q1, particularly during end of the quarter. The outbreak of the COVID-19 pandemic coupled with the disagreement within OPEC+ have led to a parallel supply and demand shock on global oil markets leading to a massive drop in Oil & Gas prices. Furthermore, INA experienced a cyber-attack which created operational challenges, but core operations and market supply were not interrupted and the business continuity was ensured.

In the first 3 months of 2020, INA recorded revenue from contracts with customers of HRK 3.95bn, representing a decrease of 7.1% YoY. Such a decrease was triggered mainly by Refining and Marketing sales revenue decrease since higher sales could not compensate for the less favorable external environment. Exploration and Production revenues of HRK 820m (-15% YoY), were mainly driven by 12% lower hydrocarbon prices and the natural decline in production, primarily Croatian natural gas volumes. Consumer Services sale quantities were down only by 3% in Q1, as the bigger drop in demand triggered by the COVID-19 pandemic measures occurred at the end of the reporting period.

On the expenses side, total operating expenses observed a sharp increase of 15.3% YoY, amounting to HRK 4.96bn. Such an increase mostly came on the back of costs of raw materials and consumables which were 376% YoY higher at HRK 1.25bn, reflecting different processing dynamic, primarily due to Rijeka Refinery turnaround on Q1 2019. Costs of other goods sold in Q1 2020 decreased 19% YoY and amounted to HRK 1.62bn resulting from lower goods sales.

In such environment CCS EBITDA of INA remained positive at HRK 433m (-14% YoY). However, the reported EBITDA was negative, amounting to HRK -495m (compared to HRK 539m in Q1 2019) primarily due to inventory revaluation driven by external environment.  

Going further down the P&L, the company recorded net financial result of HRK -83m, compared to HRK -36 in Q1 2019. Such a result mostly came on the back of a higher net FX loss in Q1 2020.

In the first 3 months of 2020, INA recorded a net loss (to majority) of HRK 798m, compared to HRK 58m in Q1 2019.

Turning our attention to CAPEX, it was significantly lower in Q1 2020 (HRK 29m) compared to Q1 2019 (HRK 95) due to the high base effect, as a major turnaround in the Rijeka refinery in 2019 boosted investment last year.