October 30 (SeeNews) - Croatian oil and gas company INA [ZSE:INA-R-A] said on Friday it turned to a consolidated loss of 1.06 billion kuna ($163 million/140 million euro) in the first nine months of 2020, from a profit of 679 million kuna in the same period last year.
INA's net sales revenue fell 32% year-on-year to 11.2 billion kuna in the January-September period, as the price of oil and gas plummeted amid the coronavirus pandemic, the company said in an unaudited consolidated financial report filed with the Zagreb bourse.
"2020 continues to be one of the most challenging years for the entire oil & gas industry and INA consequently. Although the oil markets partially stabilized, the price environment is still far from pre-crisis levels," the statement read.
"Upstream is burdened by lower realized prices, while Downstream witnesses lower demand and deteriorated refining margins," it added.
Nine-month earnings before interest, taxes, depreciation and amortisation (EBITDA) excluding special items plunged by an annual 79% to 470 million kuna.
"Expected seasonality effect helped boost the result during Q3 2020, driving the reported EBITDA also to positive area after a negative first half 2020. Exploration and Production expected natural production decline stayed burdened by the low hydrocarbon prices, especially in the natural gas area, with reduced prices but also lower demand considering the economic downturn," the head of INA's management board, Sandor Fasimon, said in the statement.
"Refining on one side benefited from higher share of own product sales, but on the other side witnesses’ negative margins caused by lower economic activity. Compared to first half of 2020 Retail performed significantly better in Q3 2020, and the 16% decrease in volumes compared to first nine months 2019, can be considered a strong result taking into consideration the overall market conditions," he added.
Net sales in the exploration and production segment fell by 42% to 1.64 billion kuna and the segment's EBITDA excluding special items decreased by 61% to 707 million kuna.
Net sales in the refining and marketing segment, including consumer service and retail, fell 32% to 10.8 billion kuna in January-September, with the segment's EBITDA excluding special items turning to a negative 334 million kuna, from a positive 336 million kuna in the same period last year.
Capital expenditure plummeted 51% to 750 million kuna in the review period.
"INA operations during 2020 required several operative adjustments in order to ensure sustainable cash generation. Postponing non-critical investments and taking other numerous internal optimization activities were the main focus, thanks to which strategic projects INA is committed to, such as Rijeka Refinery Upgrade project as part of INA R&M New Course program, are not endangered," Fasimon noted.
INA's shares last traded on the Zagreb bourse on Thursday, closing flat at 2,840 kuna.
(1 euro = 7.57551 kuna)
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