Serbia: Losses at NIS in the first nine months of 2020

, News Serbia Energy

In the period January-September of the current year, oil and gas industry was affected by adverse global trends, reduced demand for petroleum products, before all, due to the COVID-19 pandemics, as well as to sharp decline in oil prices.

Thanks to its business model that is directed towards operational efficiency increase and savings across all the levels, NIS achieved good financial results in the third quarter of 2020. At the same time, NIS managed to preserve its stability on the market of petroleum products, social security for its staff, as well as the health of our employees and consumers.

The average price of the oil of Brent type in the first nine months this year was 40.8 dollars per barrel and was lower by 37 % than the price in the same period of 2019. Even with unfavorable external factors, in the period from January to September, NIS implemented its comprehensive investment program worth 176 million euros. Majority of funds were invested in the area of oil and gas exploration and production, bottom-of-the-barrel project in the oil refinery of Pancevo, as well as in the upgrade and development of retail network in Serbia and countries in the region.

In the third quarter, EBITDA indicator amounts to 68 million euros, while the same indicator for 9 months of 2020, amounts to the total of 88.5 million euros. NIS also preserved its positive cash flow, which was, in the period January-September 167 million euros. Net profit realized in the third quarter was 16.2 million euros, but unfavorable macroeconomic situation in the first half of the year influenced the NIS Group to record the loss of 70.6 million euros in first nine months of the current year.

In the period January-September, 952 thousands of conditional tons of oil and gas was produced, which is at the level of the results from the same period last year. The volume of refining in Pancevo Oil Refinery increased by 14 % if compared with nine months of the previous year and it amounts to 2.6 million tons of crude oil and semi-finished products. Total trade with petroleum products in the reporting period is 2.5 million tons, which is lower by 3 % than in the same period of 2019, but it is also a notable result, bearing in mind the decreased demand for products in the circumstances of coronavirus pandemic. At the same time, NIS continued to develop its retail network, within which seven petrol stations started its operation in Serbia. In addition, regional network was also expanded, and six new station started its operation – five of them in Bosnia and Herzegovina and one in Romania. In this period, NIS noted also increase of export of 19 %, compared to the same period of 2019.

CEO of NIS Kyrill Tyurdenev said that, despite not very easy circumstances, the company managed to preserve its liquidity and regular market supply. In addition, NIS remains the stable source of income for its shareholders and it will pay, as dividends for 2019, the amount of 37.4 million euros, which is 25 % of last year’s net profit. The program of operation efficiency increase measures implemented across the levels of NIS Group gave the effect of 8.5 million euros to EBITDA indicator, which testifies about the company’s commitment to face the crisis that stirred and upset the world economy.