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Serbia's NIS expects 2016 profit to fall to 12.5 bln dinars (102.6 mln euro)

Serbia's NIS expects 2016 profit to fall to 12.5 bln dinars (102.6 mln euro) Source: NIS Press Center

BELGRADE (Serbia), January 3 (SeeNews) - Serbian oil and gas company NIS [BEL:NIIS] CEO Kiril Kravchenko said net profit for 2016 is expected to fall to 12.5 billion dinars ($106.6 million/102.6 million euro) from 14.6 billion dinars a year earlier.

The earnings before interest, taxes, depreciation, and amortisation (EBITDA) are seen down at 35 billion dinars from 46.5 billion dinars as a result of the low oil prices, which amounted to an average $50 per barrel, NIS quoted Kravchenko as saying in an interview with national daily newspaper Politika on Saturday. 

NIS estimates the effect from the efficiency increase measures taken to stand at 8.5 billion dinars in 2016 and aims to keep dividend ratio at 25% this year, Kravchenko added.

In December, NIS presented its business plan for 2017, envisaging a 6% increase in investments to 28.6 billion dinars ($248.8 million/232 million euro).

The group aims to invest 80 billion dinars in 2018 and 2019 and to boost oil and gas reserves by 3% annually in each of the next three years, Kravchenko explained. 

Moreover, the company aims to enter the electricity production sector and already has a cooperation agreement with a Chinese company for the construction of geothermal power stations, he stressed. 

At the end of last month, Serbia's parliament passed a law on the restructuring of 254 million euro of debt of state-Š¾wned petrochemicals producer HIP Petrohemija owed to NIS. The Serbian government will convert 105 million euro of the liabilities of HIP Petrohemija to NIS into state debt and will repay it in six instalments until June 2019. A total of 71 million euro of interest will be written off, while 78 million euro will be converted into capital owned by NIS.

The oil and gas company aims to remain a minority shareholder in HIP Petrohemija and to invest the money received from the government in strategic projects such as the activities in the Bottom-of-the-Barrel project aimed at expanding the company's product portfolio, Kravchenko said.

NIS intends to build in 2017 a 140 MW combined heat and power plant in Pancevo, near Belgrade, and will proceed with the construction of the Plandiste wind farm in northern Serbia. Also, NIS will build the Ostrovo compressed natural gas (CNG) plant.

The company generated a turnover of 982.4 million dinars on the Belgrade stock market in 2016, the highest one among the blue chips. The company was the second biggest gainer among the blue chips, as its share price rose by 23.33% last year and closed the last session for 2016 at 740 dinars.

(1 euro = 121.789 dinars)

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