Serbia: GazpromNeft NIS oil company CEO Kirill Kravcheno satisfied with overall 2014 business year despite challenges

27. May 2015. / News Serbia Energy

Kirill Kravchenko, Chief Executive Officer of GazpromNeft Oil company of Serbia NIS, says that, in spite of the difficult year, NIS achieved good results in 2014 in all business segments and successfully completed key projects.

Although the oil and gas sector was hit by similar crisis in 2008, when the fourth quarter recorded a substantial fall of oil prices and RSD devaluation just like in 2014, NIS’ results today substantially differ from those seven years ago. The Company closed 2008 with losses of eight billion RSD, while, in 2014, it recorded net profit of 27.8 billion RSD, while currency gains and losses amounted to as much as 13.2 billion RSD.

Although the extremely adverse macroeconomic conditions, which prevailed on the global hydrocarbon market in 2014, exerted a negative impact on the Company’s financial results, owing to the business process efficiency improvement program in the main busi ness segments, NIS managed to mitigate the fall in EBITDA indicators to eight per cent, to the level of 63.4 billion RSD.

– We may well say that we scored victory, given that our profit dropped far less than profit of our competition – Kravchenko explained.

NIS management, also shared the problems of its parent company, Gazprom Neft, which was facing economic sanctions, and was dealing with the negative impact of the Russian rouble’s plunge, which had rendered the overall business process even more difficult to cope with. Add to this extremely bad local macroeconomic environment and it is clear how tough challenges the company was facing.

The current situation offered an opportunity for increase of NIS’ market share as opposed to its regional competition which was in a comparably worse position.If NIS seizes the opportunity, it may come out even stronger and bigger, and this will eventually have positive effect on the share prices.

Revenues derived from sales amounted to 258 billion RSD, which is at the level of 2013. Likewise, business operations of the Sales and Distribution were at the approximately same level like in 2013, and 3.08 million tons of petroleum products were sold across Serbia. The share of motor fuels in the overall sales soared by 57.9 per cent, whereas NIS’ share in the national market remained at the level of around 78 per cent. Gazprom ranks first in Serbia, and second in the region in terms of the average output per one petrol station.

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