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Serb NIS Sees Difficulty in Maintaining Last Year’s Profit Level

Naftna Industrija Srbije AD (NIIS) said it will have “difficulty” maintaining its profit level this year from 2012 amid falling oil prices and higher taxes.

First-quarter net income was steady from a year ago at 8.3 billion dinars ($97.6 million), while earnings before interest, tax, depreciation and amortization fell 22 percent to 12.1 billion dinars, in line with its own forecast, the Novi Sad, Serbia-based company said today in an e-mailed statement.

“Unfortunately, the negative external factors had a serious impact on NIS’s business results,” Chief Executive Officer Kirill Kravchenko said in e-mailed comment. “Already today we understand that it will be a very difficult task to maintain the company’s financial results at last year’s level.”

Controlled by OAO Gazprom Neft (GAZP), NIS had a 49.5 billion- dinar net income in 2012, 22 percent more than a year earlier, on bigger output and refinery upgrade. The company said it will seek to offset the falling prices with further upgrades. NIS’s three-month investments rose 59 percent to 12.2 billion dinars.

Oil and gas production rose 5 percent in the first quarter from the same period a year earlier to the oil equivalent of 411,000 tons, with refineries processing a total of 523,000 tons, a 27 percent annual increase. Fuel sales rose 12 percent to 566,000 tons.

Overall fuel consumption in Serbia was 8 percent lower in the first three months of the year, compared with January-March 2012, NIS said, adding the decline was partly because of increased excise and value-added tax rates in Serbia.

To contact the reporter on this story: Misha Savic in Belgrade at msavic2@bloomberg.net

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

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