SARAJEVO (Bosnia and Herzegovina), March 20 (SeeNews) – The future operations of Bosnian oil refineries Brod [BANJ:RNAF-R-A] and Modrica [BANJ:RFUM-R-A] are cast in doubt due to the accumulated debt of the companies, their auditor, BDO, has said.
The accumulated debt of Rafinerija Nafte Brod totalled 611.7 million marka ($385.0 million/312.8 million euro) at the end of 2017, while the debt of its sister company Modrica reached 53.9 million marka, according to the audited 2017 financial reports of the two companies filed with the Banja Luka Stock Exchange.
Rafinerija Nafte Brod and Rafinerija Ulja Modrica are both majority-owned by Russia's NeftegasInCor.
The auditor, BDO, explained in the separate filings that the companies' debt signals the existence of significant uncertainties that may cast doubt on their ability to continue to operate.
BDO pointed out that in order for Brod and Modrica to continue their activities, their parent company will need to continue to provide financial support.
According to the results of the audit, Brod's total assets dropped to 766.9 million marka at the end of 2017 from 819.6 million marka a year earlier, while the assets of Modrica rose to 197.1 million marka from 194.8 million marka.
Brod's assets were also lower by 63.9 million marka) than the company's short-term debt, BDO has found.
In 2017, Brod's net loss narrowed to 15.0 million marka, from 71.5 million marka a year earlier. Modrica, on the other hand, turned to a net profit of 3.2 million marka in 2017, from a net loss of 1.0 million marka a year earlier.
Both refineries are based in the Serb Republic, one of the two entities forming Bosnia and Herzegovina. The other is the Federation.
(1 euro=1.95583 marka)