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

April 25 (Bloomberg) -- Naftna Industrija Srbije AD 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, 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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