Thanks to the business model aimed at increasing operational efficiency and savings at all levels, NIS achieved good financial results in the third quarter of 2020. At the same time, NIS managed to preserve stability on the market of petroleum products, social security of employees, as well as the health of employees and consumers.
In the period January-September of the current year, the oil and gas industry was under the influence of negative global trends, primarily the reduction of demand for petroleum products due to the COVID-19 pandemic, as well as a sharp drop in oil prices. The average price of Brent oil in the first nine months of this year was 40.8 dollars per barrel and was 37% lower compared to the same period in 2019. Despite unfavorable external factors, in the period January-September this year, NIS realized an extensive investment program worth 172.5 million euros. Most funds were invested in the field of oil and gas exploration and production, the “Deep Refining” project at the Pancevo Oil Refinery, as well as in the modernization and development of the retail network in Serbia and the countries of the region.
The calculated liabilities of the NIS Group on the basis of taxes and other public revenues for 9 months of 2020 amount to 1.09 billion euros.
The EBITDA indicator in the third quarter amounts to 66 millions euros, while at the level of 9 months in 2020, this indicator is a total of 86 million euros. NIS also maintained a positive operating cash flow. In the third quarter, a net profit of 15.8 million euros was realized, but the unfavorable macroeconomic situation in the first half of the year influenced the NIS Group to record a loss of 69 million euros in the first 9 months of the current year.
In the period January-September, 952 thousand conditional tons of oil and gas were produced, which is at the level of the results from the same period last year. The volume of processing in the Pancevo Oil Refinery has increased by 14% compared to 9 months last year and amounts to 2.6 million tons of crude oil and semi-finished products. The total turnover of petroleum products in the reporting period is 2.5 million tons, which is 3 percent less than in the same period in 2019, but also a valuable result given the significant decline in demand for fuels in the epidemic of the new corona virus. At the same time, NIS continued the development of the retail network within which 7 fuel supply stations started operating in Serbia, including the station “Novi Sad 16”, the most modern in the NIS network. In addition, the network has been expanded in the region, where a total of 6 stations have been put into operation – 5 in Bosnia and Herzegovina and one in Romania. In this period, NIS also recorded an increase in exports of 19 percent compared to the same period in 2019.
NIS continued to support the community in the fight against the spread of COVID-19. Among other things, together with UNICEF, 50 flow meters were donated to health institutions in Belgrade. In cooperation with the Ministry of Education, Science and Technological Development and the Ministry of Internal Affairs, 72 projects were selected throughout Serbia, which NIS will support with one million euros in order to support the digitalization of the teaching process and the safety of students and teachers in schools.
Kiril Tjurdenev, General Director of NIS, stated: “Despite not easy circumstances, we managed to preserve the liquidity of NIS, orderly supply of the market, as well as the health and social stability of our employees. Also, we remain a stable source of income for our shareholders and we will pay 36 milllion euros as a dividend for 2019, which is 25 percent of last year’s net profit. The program of measures to increase operational efficiency, which we implemented at all levels of the NIS Group, had an effect of 8.3 million euros on the EBITDA indicator, which testifies to our commitment to face the crisis that is shaking the world economy. I believe that such a relationship will give results in the rest of the year and that we will successfully overcome all challenges for the benefit of our shareholders, employees and the community in which we operate,” Kurir reports.
