July 28 (SeeNews) - Croatian oil and gas company INA [ZSE:INA-R-A] said on Thursday its first-half consolidated net profit, excluding special items, plummeted 93% year-on-year to 23 million kuna ($3.4 million/3.1 million euro) mainly due to a deterioration of the external environment.
Net sales revenues dropped 32% to 6.3 billion kuna in January-June, INA said in a statement.
Consequently, earnings before interest, tax, depreciation and amortisation (EBITDA) excluding special items, fell 55% to 723 million kuna, on the back of a low Brent environment of around $40 per barrel, significantly lower gas prices, as well as deteriorated refinery margins.
"2016 is and will be marked by an adverse external environment, not only for INA but for oil and gas companies in general. To tackle that challenge, the company is re-evaluating all projects and processes to enable a stabile current position and future growth," INA said in the statement.
It noted that continuous efforts for maximizing production on existing upstream assets resulted in a 12% increase in oil production through June, with domestic production increasing by 16%. Gas production on the other hand decreased by 11%, mainly on the back of offshore drop.
On the upside, INA signed an onshore exploration agreement for block Drava-2 in June and acquired an additional 33.5% share in Bosnia's Energopetrol in July, boosting its future growth possibilities. Starting from the third quarter, Energopetrol will be fully consolidated in INA results.
INA's capital expenditure jumped 31% to 717 million kuna in the first six months of the year despite challenges on external markets.
In 2015 INA's consolidated net loss narrowed 25% to 1.42 billion kuna, as net sales revenue dropped 21% to 18.9 billion kuna.
INA has exploration and production operations in Croatia, Africa and the Middle East and operates a filling station network in its home market and in neighboring countries. Hungary's MOL owns 49.08% of INA and the Croatian government controls a further 44.84%.
(1 euro=7.4844 kuna)