NIS Boosts Profit 2.8% as Serbian Refinery’s Costs Decline

Naftna Industrija Srbije AD (NIIS), the Serbian refining unit controlled by Russia’s OAO Gazprom Neft (GAZP), said first-half profit rose 2.8 percent as costs declined.

Net income increased to 22 billion dinars ($229 million) while earnings before interest, taxes, depreciation and amortization soared 80 percent to 36.8 billion dinars, the company said in a regulatory statement today.

The weakening of the dinar against the euro and a decline in Urals crude oil prices capped the company’s profit increase, NIS Chief Executive Officer Kirill Kravchenko said at a news conference in Belgrade today. The weakening of the dinar alone resulted in “negative exchange rate differentials of 9.9 billion dinars,” Kravchenko said.

The country’s economic slump will “negatively affect the company” this year as industrial customers have difficulties paying their bills, Kravchenko said.

State-owned Srbijagas JP, its biggest gas buyer, hasn’t paid bills since the start of the year, owing 15.5 billion dinars to NIS.

Oil output rose 13 percent to 826,000 tons and investments rose 76 percent to 17.2 billion dinars, the company said. Debt to banks dropped to $92 million from $444 million at the end of March.

To contact the reporter on this story: Gordana Filipovic in Belgrade at gfilipovic@bloomberg.net

To contact the editor responsible for this story: James M. Gomez at jagomez@bloomberg.net