Friday, 1 May 2020

INA Unions Want Government to Give up Dividend

ZAGREB, May 1, 2020 - The three biggest trade unions in the INA oil group have asked Prime Minister Andrej Plenković to get INA owners - the government and the Hungarian oil company MOL - to give up the payment of the dividend for 2019.

The also urged the government to consider the possibility of including INA and its companies in a set of measures aimed at preserving jobs.

"The financial reports clearly show the gravity of the consequences of the economic crisis and its effects on the INA Group, jeopardising more than 9,000 jobs," one of the unions said in a press release.

Another union said that the proposal to cover INA with the government measures that already benefited 84,000 employers was reasonable.

The unions demand the preservation of jobs, investments and economic activity.

 The INA Group generated HRK 3.95 billion from sales in the first quarter of 2020, which was down by 7% in comparison to the corresponding period of 2019, this leading oil and gas company stated on Thursday.

Furthermore, the company's financial statement shows that INA had a net loss of HRK 798 million in Q1 2020 as against a profit in the same period in 2019.

"Operations of INA, d.d. in Q1 2020 have witnessed unprecedented market dynamics, particularly at the 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," reads a press release on INA's web site.

Additionally, INA experienced a cyber-attack which created operational challenges but core operations and market supply were not interrupted and the business continuity was ensured, said INA.

INA, d.d. revenues recorded a 6% decrease in line with the mentioned market conditions while the reported result turned negative and amounted HRK 531 million, primarily due to inventory revaluation driven by external environment.

"Exploration and Production EBITDA excluding special items decreased by 22% to HRK 419 million mainly caused by 11% lower realized hydrocarbon price and the natural decline in hydrocarbon production, primarily Croatian natural gas volumes."

Refining and Marketing including Consumer Services and Retail EBITDA excluding special items, hit by external drivers, was negative in the amount of HRK (978) million. Consumer Services sale quantities were only down by 4% in Q1, as the biggest drop in demand occurred at the end of the reporting period.

CAPEX was significantly lower in Q1 2020 compared to Q1 2019 due to the high base effect, as a major turnaround in the Rijeka refinery in 2019 boosted investments last year, INA said in the statement.

More news about INA can be found in the Business section.

Friday, 3 April 2020

INA Donates More Than 1.5 Million Kuna to Croatian Health Institutions

As Poslovni Dnevnik writes on the 2nd of April, 2020, aware of the difficult circumstances in which the Croatian health system, institutions and civil society have found themselves in their efforts to curb the spread of coronavirus, which has been further aggravated by a strong earthquake hitting Zagreb, INA wants to facilitate the procurement of materials and equipment and help to repair the damage.

INA has been investing in improving the health care system in Croatia for many years now, and following the utterly unprecedented situation in which we're all now in - facing two extraordinary circumstances - a coronavirus pandemic and the aftermath of a severe earthquake in Zagreb, the company feels even more responsibility to provide assistance.

In order to help the extraordinary efforts of health professionals, INA donated a massive 250,000 kuna each to the Dr. Fran Mihaljević Clinic for Infectious Diseases and the Primorje-Gorski Kotar County Health Centre, and the Sisak General Hospital (Dr Ivo Pedisic) and the Croatian Red Cross were donated 100,000 kuna each.

The Special Hospital for Chronic Pediatric Diseases in Gornja Bistra and the Croatian Institute for Emergency Medicine were also donated 50,000 kuna each by INA. These huge donations will be used to procure protective equipment, medical supplies, disinfection devices and supplies, and medical equipment and devices needed to care for patients and to facilitate the organisation of emergency services.

The Rebro Pediatric Oncology Foundation was donated 200,000 kuna for the construction and equipping of their pediatric hematology and oncology departments, and 100,000 kuna was donated for the Pediatric Department at the Pula General Hospital. On top of all of that, INA donated a further 50,000 kuna to the Kamensko Association, which sews cotton masks for the Association of the Blind, DVD Selce, homeless people, users of soup kitchens and homes for the elderly and infirm, while the Ruđer Bošković Technical School from Vinkovci was donated 10,000 kuna to make visors on 3D printers that the school will then donate to Croatian hospitals.

To help repair the damage caused by the recent Zagreb earthquake, INA donated an additional 250,000 kuna to the Together for Zagreb campaign and another 100,000 kuna to the Zagreb Children's Diseases Clinic.

"The circumstances we're facing are truly unprecedented. This is the moment when we all need to come together, because only by working together can we overcome the challenges we're face these days. INA has been continuously supporting the Croatian healthcare system for many years through numerous donations to hospitals. We're now back once again side by side with our health care system and with all those who can help prevent the spread of the coronavirus pandemic and repair the effects of the Zagreb earthquake. As always, we want to help those who need it the most, join them, support them and thank them for everything they do,'' said INA's CEO Sándor Fasimon.

INA also helped supply the Civil Protection Headquarters of the Republic of Croatia by donating 720 liters of INA Denizol, a new product that INA LUBRICANTS began producing last week. For their utterly exceptional dedication to their life saving work, INA would like to thank all health professionals and is offering them free coffee at selected retail locations within the "Coffee for Heroes" campaign.

INA is also helping things run smoothly in the business sense during this difficult situation by ensuring the smooth supply of fuel to the Croatian market. By following all instructions and measures to combat the spread of coronavirus, business continuity has been ensured.

For rolling information and updates on coronavirus in Croatia, follow our dedicated section.

Tuesday, 17 March 2020

Analysis of INA's Operations, Value to be Completed in Q2

ZAGREB, March 17, 2020 - The Council for INA on Tuesday accepted a report by its investment consultant on the course of due diligence in the Croatian oil company, defining the course of further activities for the possible purchase of INA shares held by the Hungarian oil and gas group MOL.

An analysis by the investment consultant on company's operations and value is expected in the second quarter, the government said in a statement.

The INA Council, an advisory body tasked with providing guidelines, taking action and putting forward proposals to the government regarding preparations for, implementation and financing of the possible purchase of MOL's stake in the company, held its 11th meeting today under the chairmanship of Prime Minister Andrej Plenković.

Representatives of the Lazard investment consultant and other professional consultants submitted a report to the Council on the course of due diligence in INA via video link.

"The Council accepted the report and determined the course of further activities in the process of the possible purchase of MOL's interest in the company, as part of which an analysis by the investment consultant of the company's operations and value can be expected in the second quarter of this year," said the government.

More INA news can be found in the Business section.

Thursday, 23 January 2020

Belgians Embark on Bio-Refinery Project in Croatian City of Sisak

As Poslovni Dnevnik/Vecernji list writes on the 22nd of January, 2020, the Belgian company De Smet Engineers & Contractors (DSEC) has announced that they have begun work on a basic engineering contract for INA, which covers part of a project to build a second-generation bioethanol plant in the continental Croatian city of Sisak.

That being said, a statement claims that "DSEC will also integrate the selected process package into the project study and evaluate the associated capital and operating costs."

When completed, the project will enable INA to validate the planned construction of the Sisak plant, which INA promised as part of the compensation measures following the announcement of the closure of the basic refinery at the Sisak refinery. DSEC also noted something similar in their announcement, pointing out that the project aims to "establish sustainable industrial activity as an alternative to the Sisak oil refinery".

The value of the contract and work is not yet known and hasn't been publicly stated, but it is part of the activities kickstarted back in 2017 by INA in connection with the planned production of bioethanol in Sisak.

The plan is for the biorefinery to have an annual capacity of 55,000 tonnes of second-generation (2G) bioethanol, and will use locally grown miscanthus and lignocellulosic biomass, such as cereals and oilseeds, for the raw material.

According to the Environmental Impact Study of the Future Bioethanol Plant of 2017, the production of electricity for use from renewable sources (residues of biomass from production and, if necessary, wood chips) and the production of carbon dioxide produced in bioethanol production, are considered to be an increase in oil recovery.

For the planned production capacity, the annual quantity of raw material needed is estimated at 370,000 tonnes in total, which INA intends to secure by collecting agricultural residue directly from the fields and growing energy plants 75 kilometres in diameter around the city of Sisak.

Several months ago, INA completed miscanthus testing for biofuel production, saying that the test results were optimistic because they showed that sunliquid technology could successfully process miscanthus into lignocellulosic sugar and ethanol.

Follow our business page for much more.

Saturday, 14 December 2019

INA Finally Going Ahead With 4 Billion Kuna Investment in Rijeka Refinery

As Darko Bicak/Poslovni Dnevnik writes on the 13th of December, 2019, according to INA, the decision on a heavy-waste treatment facility comes one year after the announcement of INA's R&M New Direction 2023 program, which aims to transform INA's refining system to generate profits instead of losses.

Today, INA made a decision to invest a massive four billion kuna in a heavy waste treatment plant at the Rijeka Oil Refinery. As was explained during an extraordinary press conference in Zagreb, the company's supervisory board gave its prior approval for the construction of the Heavy Duty Processing Facility in Rijeka, and INA's management board then made a unanimous decision on the investment. Works on the new plant will begin early next year, they say, and it is expected to start operating at some point in 2023.

Sándor Fasimon, CEO of INA, said the decision on the heavy-duty processing plant marks an important step in the implementation of the R&M New Direction 2023 program, as well as an important moment in the company's history as it is the largest investment INA has made in decades.

"With this decision, the Rijeka Oil Refinery will be transformed into a modern European refinery while ensuring that INA maintains a leading position on the market. It's a major investment that will significantly affect the company's operations in the future," said Fasimon.

The chief executive officer of the MOL Group and the deputy chairman of INA's supervisory board commented that this decision confirms the MOL Group's commitment to INA. "By constructing a heavy waste treatment plant, we'll significantly increase the complexity and efficiency of the Rijeka refinery. I firmly believe that this investment will have a significant positive impact on the company's profitability in the future,'' said Molnar.

Tomislav Ćorić, Minister of Environment and Energy, said that the announcement of about four billion kuna in investment over the next three years is the most wonderful Christmas gift to Croatia that could be expected.

''Today's decision to launch the modernisation project of the Rijeka Oil Refinery is a major step forward. This is one of the biggest investments in our energy sector and I'm glad that it was realised precisely during the term of this current government. This investment will improve the product structure of Rijeka, increase profitability and improve the company's competitiveness in the field of environmental protection by significantly reducing CO2 and other harmful gases,'' stated Minister Ćorić.

A year ago, Prime Minister Andrej Plenković promised us a "Christmas present" in the form of an announcement that Croatia would go ahead with the purchase of MOL's stake in INA.

According to INA, and as previously mentioned, the decision on this treatment facility comes one year after the announcement of the R&M New Direction 2023 program. The program includes the concentration of crude oil processing activities in the Republic of Croatia at the Rijeka Oil Refinery and, as part of this, the conversion of the Sisak Oil Refinery into an industrial centre that will cover the production of bitumen, which was approved in March this year and is set to launch in 2021.

Still to come is a logistics hub and, potentially, lubricant production and even a bio-component refinery. With the implementation of all activities covered by the INA R&M New Direction 2023 program, after 2023, INA expects an average annual EBITDA growth of over 1 billion kuna in total.

Make sure to follow our dedicated business page for much more.

Friday, 15 November 2019

INA Plans to Expand Retail Network in Bosnia and Herzegovina

ZAGREB, November 15, 2019 - Croatia's INA oil company intends to buy the Banja Luka-based Krajinapetrol company to expand its existing network of petrol stations in Bosnia and Herzegovina, the Bosnian business news website capital.ba said on Friday.

According to capital.ba, INA has received the green light from Republika Srpska's (RS) Energy and Mining Minister Petar Đokić that it can conduct due diligence at Krajinapetrol before making a final decision on the possible purchase of a majority stake.

Krajinapetrol's current majority owner is the entity's government and related shareholders' funds, while INA currently owns 9.7% of the company's shares. The company emerged after the former Yugoslavia disintegrated and the RS authorities took over the petrol stations and infrastructure that INA had owned in Bosnia and Herzegovina during the time of Yugoslavia.

Krajinapetrol now manages a network of 15 petrol stations mostly distributed in and around Banja Luka.

Financial indicators show stable business operations and a growing revenue, which this year has increased by 2.5 million euro from 2018.

Krajinapetrol's total capital is estimated at 12 million euro and the company currently employs 168 workers.

INA has the largest retail network for oil derivatives in Bosnia and Herzegovina, with 45 petrol stations which were originally limited to the Bosniak-Croat Federation entity but later began to expand to the Bosnian Serb entity.

More news about the Croatian national oil company can be found in the Business section.

Monday, 28 October 2019

INA's Revenue Up 2%, Profit Decreases

ZAGREB, October 28, 2019 - INA Group's revenue in the first nine months of 2019 totalled 16.55 billion kuna, two percent more than in the same period of 2018 while the group's profit dropped by 36% to 679 million kuna, shows a financial report the group released on Monday.

CCS EBITDA excluding special items amounted to 2.397 billion kuna, improving 8% compared to the same period last year. The average oil prices decreased somewhat during the first nine months of 2019, therefore the reported EBITDA amounted to 2.208 billion kuna and profit amounted to 679 million kuna, the group said.

The group notes that the first nine months of this year were an intensive investment period.

"CAPEX increased by 69% compared to the same period last year and amounted to 1,541 million kuna, mainly driven by refining investments. Investments in Croatia amounted to 1,319 million kuna, more than double compared to the same period last year. Net gearing amounted to 21% with net debt at 3,036 million kuna," the group said.

Sandor Fasimon, President of the Management Board of INA, said in a comment that the company's intensive investments in the first nine months had started to show results.

"Total investments exceeded 1.5 billion kuna, majority of which was spent domestically. Rijeka refinery turnaround, as one of the largest ones in the company’s history, was completed. Numerous improvements implemented during this turnaround are already visible in the better production structure, with a higher share of profitable white products. This is also to be further improved with future expected projects, in line with the INA Downstream 2023 New Course program.

"Also, the increased level of Upstream activities in Egypt is starting to give results with a 23% increase of oil production in Egypt. This, together with the continuous workover activities in Croatia, currently stabilized the hydrocarbon production impacted with natural decline," Fasimon said.

More INA news can be found in the Business section.

Wednesday, 23 October 2019

INA Extracts 21 Billion Cubic Metres of Gas from Northern Adriatic

ZAGREB, October 23, 2019 - The INA oil and gas company on Wednesday marked the 20th anniversary of continued production of natural gas in the Adriatic Sea.

"In the last 20 years over 21 billion cubic metres of gas has been extracted by 18 platforms in the northern Adriatic. These figures encourage us to make further progress in the exploration and exploitation of hydrocarbons in Croatia, primarily in the northern Adriatic which offers the potential which I believe we will know how to use," Environment and Energy Minister Tomislav Ćorić said at a ceremony held on the Ivana A platform, located 36 kilometres from the nearest mainland.

Ćorić stressed that hydrocarbon exploration and exploitation was being conducted in line with the highest environmental protection and safety standards. "Successful projects like this testify to the importance of strategic and responsible management of resources with a view to developing the economy and increasing the share of domestic production."

Ćorić visited the platform in the company of INA CEO Sandor Fasimon and the head of the Agency for Hydrocarbons, Marijan Krpan.

Fasimon said: "The purpose of our oil and gas exploration and production activities is to maximise the existing potential domestically, both offshore and onshore. We have incorporated this into our development plans because 15 years from now we want to be proud of our company and remain a reliable partner to the Croatian economy."

Krpan said that the Northern Adriatic project was very demanding in terms of technology and concept and that it put Croatia among countries with the know-how for offshore hydrocarbon production.

Ćorić recalled that INA had begun hydrocarbon exploitation in the northern Adriatic in 1999 and that it was an excellent move. He said that currently 1.1 million cubic metres were extracted daily or about 400 million annually, which is about 15-20 percent of domestic consumption.

"In the last few years we have launched several campaigns for hydrocarbon exploration and exploitation, all of them onshore. The northern Adriatic offers certain potential and I'm sure we will know how to use it in the future," the minister said.

Asked about the LNG terminal, Ćorić said that it was being built and that it would be operational at the end of 2020. He noted that the LNG terminal would help meet Croatian needs for gas and diversify supply routes for Europe. "The exploitation of hydrocarbons is one way of reducing Croatia's energy dependence, the other being the construction of alternative infrastructure," Ćorić said.

More news about gas in Croatia can be found in the Business section.

Sunday, 29 September 2019

Rijeka Oil Refinery to Install 4 Billion Kuna Worth of Equipment

ZAGREB, September 29, 2019 - An overhaul worth 800 million kuna was carried out in the Rijeka Oil Refinery in Urinj over the first four months of this year, the largest to date, and the installation of a 4 billion kuna delayed coker is being prepared, it was said at the Refinery Open Day on Saturday.

CEO Ivan Krešić said the event was organised to make the company as transparent as possible in its operations and relations with the local community.

The delayed coker, whose installation should be completed in three years' time, will increase profitability and enable the Rijeka refinery to rank with the most high-tech refineries in Europe as well as ensure its long-term viability, he added.

A contract on the installation should be signed by year's end.

More than 2,000 external contractors from dozens of domestic and international companies were hired for the overhaul, said Ivica Jerbić, the refinery's director.

Regular air and sea quality measurements around the refinery show the best results, except in the immediate vicinity, but the overhaul will significantly reduce hazardous particle emissions, he added.

More news about INA oil company can be found in the Business section.

Wednesday, 31 July 2019

Lazard Selected as New Consultant on Buyback of MOL's Stake in INA

ZAGREB, July 31, 2019 - The New York-based investment bank Lazard is the Croatian government's new consultant on the buyback of the Hungarian energy group MOL's stake in the INA oil company, Finance Minister Zdravko Marić told reporters in Zagreb on Wednesday after a meeting of the government's Advisory Committee on INA.

Marić recalled that a consortium of Morgan Stanley, Intesa Sanpaolo Group and Privredna Banka Zagreb had previously been selected as a consultant, but that disagreements had emerged over what should be included in the agency agreement, notably technical aspects of the hiring of consultants.

"We decided to conduct interviews with other bidders from the first round and we have selected a new consultant, Lazard," Marić said.

Environment and Energy Minister Tomislav Ćorić said that the decision on signing the agreement with Lazard would be formally adopted at a Cabinet meeting on Thursday.

Ćorić said that the new consultant's services could cost 9 million euro at most.

The agreement with Morgan Stanley, Intesa Sanpaolo Group and Privredna Banka Zagreb cost €8 million.

Ćorić said that due diligence could be completed in six months, and that the government would make its offer to MOL in the first quarter of 2020.

More news about INA can be found in the Business section.

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