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NIS reports decreased revenue and profitability in 2024 amid sanctions and operational challenges

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Amid expectations regarding the fate of the Oil Industry of Serbia (NIS) following the imposition of U.S. sanctions, the company has released its annual business results, which were anticipated to be less favorable compared to the previous year.

In 2024, NIS saw a slight 1% decline in revenue, totaling 408.1 billion dinars. This drop occurred despite a decrease in natural turnover and a 2% lower Brent oil price compared to the previous year, according to an analysis by Momentum Securities brokerage. Profitability, however, took a significant hit compared to 2023. The decline was partly due to scheduled maintenance at the Refinery, losses at Petrohemija, and the higher cost of oil stocks from the previous period.

The company’s key profitability indicator, EBITDA, decreased by 35%, amounting to 44.4 billion dinars. Without the impact of Petrohemija, EBITDA stood at 51.6 billion dinars. In the fourth quarter alone, consolidated EBITDA plummeted to 2.0 billion dinars, down from 12.4 billion dinars in the same period last year, Momentum reported.

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Net profit for the year saw a dramatic 77% decline, dropping to 10.1 billion dinars. Excluding Petrohemija’s consolidation, net profit amounted to 17.7 billion dinars.

Non-consolidated net profit, which is typically the basis for dividend payouts, reached 18.4 billion dinars. If a quarter of the profit is distributed, this would result in a dividend of 28.2 dinars per share for shareholders.

Operational performance showed a slight decline in oil and gas production, down 1%. In the fourth quarter, refining operations saw a 5% drop, and for the year, production decreased by 11% due to the previously mentioned maintenance. Turnover also fell by 5%, driven by weaker wholesale trade (down 3%) and poor performance in segments like transit, export, bitumen, and aviation fuel. On the investment front, capital expenditure surged by 36% to 53.2 billion dinars, in line with the management’s plan. Meanwhile, the company’s debt decreased by 1%, totaling 558 million euros.

NIS shares have been suspended from trading since January 14, following a decision by the Belgrade Stock Exchange. The suspension was enacted in light of the anticipated release of public information that could significantly impact the company’s stock price.

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