NIS General Manager Kiril Tyurdenev said that the crisis caused by the fall in oil prices and the decrease in demand due to the pandemic, did not stop the development of the company.
He pointed out that key investments have continued, the company said in a statement.
“Preserving the health of employees and consumers, stability in the petroleum products market, social stability of employees and continued investment in key projects were priorities in the months behind us, marked by the coronavirus pandemic. We reduced costs, prioritized investments, but saving money on long-term development of the company for NIS is not and will not be an option. We remain focused on projects that will bring the company and Serbia the most benefits in the future,” Tyurdenev said in an interview with the daily Politika.
He added that in the first half of 2020, NIS’s business was strongly influenced by global unfavorable macroeconomic circumstances.
“For example, the average price of oil in the first half of the year was 39.7 dollars per barrel, which is 40 percent less than at the same time last year. Consumption was halved at certain times compared to expected levels. All this affected the business of our company and the financial result we have at the end of the first half of the year is not a surprise for us,” said Tyurdenev.
According to him, despite the crisis, NIS managed to maintain the EBITDA indicator at a positive level of 19.16 million euros, as well as a positive cash flow of 52.5 million euros, but due to negative macroeconomic trends, a net loss of 85 million euros was recorded.
“Despite the difficult situation, we did not reduce salaries, we did not reduce the number of employees and we managed to preserve the financing of key investments. In the first half of 2020, we invested a total of 120.8 million euros, which is a real feat considering the conditions in which we do business,” stated the General Director of NIS.
He added that one of the company’s key projects, “Deep Refining” at the Pancevo Oil Refinery, is in the pre-launch phase.
“When it starts working, “Deep Refining” in the Pancevo Oil Refinery will enable us to produce larger quantities of white derivatives – diesel, gasoline and LPG and to reduce or give up the production of black derivatives, primarily fuel oil. Specifically, for drivers, “Deep Refining” means larger quantities of the highest quality domestic fuels. For us, “Deep Refining” also means a new product, petroleum coke, which is used in construction and is now imported into Serbia,” Tyurdenev said.
Asked whether NIS is considering taking over “Petrohemija”, he said that the tender for privatization has not been announced yet.
“When it happens and when we get acquainted with the conditions, we will talk about “Petrohemija”. What I can say now is that we understand the importance of “Petrohemija” for the Serbian economy. For that reason, NIS has been actively supporting the efforts of the Government of the Republic of Serbia in finding a model that will help make Petrohemija’s business sustainable in the long run, which is its basic raw material for work. It is also important for us that this company, in which we have a 20.86 percent share in the ownership, works continuously, due to the connection with our refinery,” said the general director of NIS.
He stated that NIS has several priorities in business until the end of the year.
“First of all, the health and safety of employees and consumers, because the pandemic is not over. Then, maintaining the social stability of our employees who work extremely hard in these complex conditions. And very importantly, preserving the company’s liquidity and providing positive cash flow, which will allow us financing of key projects developed by NIS,” stated Tyurdenev, B92 reports.
