Due to geopolitical risks and supply uncertainties, global energy markets continued to be marked by high prices, with Brent levels above 100 dollars/ barrel and CEGH gas price exceeding 100 euros/ MWh in Q2 2022.
Driven by the favorable price environment, results remained strong. H1 2022 INA Group CCS EBITDA excluding special items amounted to around 320 million euros, while net profit exceeded 200 million euros.
Results improved throughout the segments with Exploration and Production revenues of almost 400 million euros and EBITDA of 280 million euros. High realized hydrocarbon prices significantly overcompensated the effect of continued natural decline of production. Negative cash flow of Refining and Marketing including Consumer services and Retail segment caused by ongoing investment activities is mitigated by the improved CCS EBITDA performance of almost 106 million euros. High energy prices and government restrictions in Retail prices and margins at the same time had a negative impact on the result. Non-fuel growth continued with 15 % increase in margin driven by expanded offer and improved sales activities.
Intensified investment activities continued, CAPEX spending more than doubled compared to H1 2021 and reached 173 million euros, of which almost a billion spent in Refining and Marketing. Aimed at moderating trend of natural production decline, Exploration and Production also increased CAPEX level, focusing on development activities, both onshore and offshore. Despite the strong operative results, the cash flow of the company in H1 2022 was negative, because of the increased investments and the unprecedented financing need of the working capital due to the global energy price levels.
President of INA’s Management Board Sandor Fasimon said that 2022 continue to be a challenging year for the global economy, with market turmoil in many areas, especially in the energy sector. High level of both oil and gas prices, together with uncertainty in the safety of supply, have led to government interventions in many countries. Rise in the prices pushed the revenues of the entire oil and gas industry but various regulatory decisions on the other hand create a position where future trends are not easy to foresee.
INA’s result in such environment stayed strong, with Exploration and Production bringing the biggest contribution to the result. Production declines as expected in line with the mature portfolio, but multiple development activities aimed at moderating natural decline are underway, both onshore and offshore.
He said that Rijeka refinery upgrade project total completion is at more than 50 % and continues as one of the largest investments in recent years, not just on INA level but also on country level. With the completion of the project supply of the domestic and core markets will be not just safe but also significantly more economically sustainable.