Naftna Industrija Srbije has formally moved to clean up one of the most difficult financial years in its recent history, with shareholders approving the coverage of the company’s 2025 loss from profits accumulated in previous years. The decision is accounting in form, but strategically it says more about the pressure now sitting around Serbia’s largest oil company, its ownership structure, and the wider energy-security risks attached to the NIS file.
At the company’s 18th regular shareholders’ meeting, NIS adopted a decision to cover losses for 2025 and determine the remaining amount of undistributed profit. According to the decision published through the Belgrade Stock Exchange, part of the profit from earlier years, recorded in the company’s balance sheet as of 31 December 2025, will be used to cover the loss shown in the income statement for the full year.
The size of the retained-profit base remains substantial. NIS had RSD 300.12bn in earlier-year profit available on its balance sheet, equivalent to roughly €2.56bn at recent dinar/euro levels. From that amount, RSD 12.23bn, or about €104m, is being allocated to cover the 2025 loss. After the loss coverage, total undistributed profit is set at RSD 287.88bn, equivalent to approximately €2.45bn.
That means NIS is not facing an immediate capital-erasure event. The company still carries a large accumulated profit cushion from earlier years, built during a period when refining margins, domestic fuel demand, regional sales and the post-privatisation investment cycle delivered stronger profitability. But the shareholder decision also makes clear that the 2025 shock has now passed beyond quarterly volatility and into the formal allocation of balance-sheet reserves.
The core issue is not the accounting mechanism itself. Companies routinely use retained earnings to absorb annual losses. The more important signal is that NIS, once one of Serbia’s most reliable profit generators and dividend contributors, has entered a period in which sanctions risk, supply-chain interruption, lower oil prices and regional asset pressures can materially change its earnings profile.
The company had already indicated earlier that 2025 was shaped by unusually complex operating conditions, above all the impact of U.S. sanctions linked to its Russian ownership structure. NIS also cited a weaker oil-price environment, with the average Brent price in 2025 at around $69.1 per barrel, roughly 14% lower than in 2024. Lower crude prices can reduce upstream earnings, while sanctions-related disruptions can affect procurement, financing, logistics, crude supply and counterparties. In NIS’s case, the pressure was not only market-driven; it was geopolitical and operational.
The 2025 result was also affected by costly oil inventories, asset impairments in Bulgaria and Romania, and the performance of HIP-Petrohemija, which recorded a loss of RSD 10.27bn during the year. This matters because NIS is no longer only a Serbian fuel-retail and refining story. It is a regional energy and petrochemical group whose exposure runs through upstream production, refining, wholesale, retail, petrochemicals, foreign subsidiaries and public-revenue obligations to the Serbian state.
Even in a loss-making year, the scale of NIS remains central for Serbia’s fiscal and energy system. The group reported calculated tax and other public-revenue obligations of RSD 207bn for 2025, while gross dividend allocations for 2024 amounted to about RSD 4.6bn. That gives the company a dual role: it is both a corporate taxpayer and a strategic energy-security asset. Any deterioration in NIS’s operating capacity therefore has implications beyond minority shareholders and market valuation.
The operational base is still large. In 2025, NIS produced 1.124mn tonnes of oil and gas equivalent, processed 3.095mn tonnes of crude oil and intermediate products, and sold 3.023mn tonnes of petroleum products. These figures underline why the company cannot be viewed as an ordinary listed issuer. Its balance sheet is tied directly to Serbia’s refining security, domestic fuel supply, import exposure, transport costs and industrial continuity.
The shareholder decision also comes after a period in which NIS’s sanctions exposure has repeatedly required temporary operating licenses and regulatory management. The broader market concern is not only whether NIS can report a profit in one quarter or another, but whether its ownership structure, access to crude supply, banking channels and insurance arrangements can remain stable enough to protect Serbia’s domestic fuel market.
There was some recovery in early 2026, with NIS reporting a return to profit in the first quarter, supported by market conditions and the restart of refinery operations after sanctions-related disruption. But one profitable quarter does not fully reverse the 2025 balance-sheet signal. The company’s underlying challenge remains the same: it is operating as a Serbian strategic company under a Russian-linked ownership structure at a time when sanctions compliance, European energy security and regional fuel supply have become inseparable.
The retained-earnings decision therefore buys accounting continuity, not strategic certainty. NIS has enough accumulated profit to absorb the RSD 12.23bn loss without threatening the formal structure of equity, but the fact that such coverage was needed shows that the company’s previous earnings model has become more fragile. Its profitability now depends not only on refining margins and fuel demand, but also on sanctions waivers, ownership negotiations, crude logistics, asset impairments and the political management of Serbia’s energy relationship with both Russia and the West.
For Serbia, the NIS case has become a concentrated test of energy-sector risk. The company is too important fiscally to ignore, too important operationally to disrupt, and too politically sensitive to resolve through a simple market transaction. The use of retained earnings to cover the 2025 loss is therefore less an end point than a balance-sheet marker in a much larger adjustment: Serbia’s key oil company is still financially cushioned, but its earnings quality and strategic room for manoeuvre are no longer what they were before sanctions entered the core of the business model.
