Croatia’s INA Turns to Net Loss in 2013 With Syrian Income Gone

INA Industrija Nafte d.d., the Croatian refiner controlled by Hungary’s Mol Nyrt., reported its first annual net loss in four years as continued recession stymied the company’s efforts to make up for lost income from Syria.

Net loss in 2013 was 1.5 billion kuna ($268 million), compared with profit of 681 million kuna in 2012, while revenue declined 8 percent to 27.4 billion kuna from a year earlier, the company said in a regulatory statement today. Earnings before interest, taxes, depreciation and amortization fell to 3.7 billion kuna from 4.6 billion kuna a year earlier, the company said.

“It was a difficult year due to recession in key markets, while the situation in Syria also moved in the negative direction,” Zoltan Aldott, the head of INA’s management board, said in a statement distributed to reporters in Zagreb.

The results are the first full-year loss for the country’s largest energy company since 2009. INA halted its profitable gas and oil business in Syria in February 2012 to comply with European Union policy on the civil war-torn Middle Eastern country. The economy of Croatia, which joined the EU in July, hasn’t grown since 2008.

Net income before adjusting for Syrian losses was 953 million kuna in 2013, the company said.

INA is also Croatia’s fourth-biggest employer and one of the country’s biggest investors. It has spent about 17 billion kuna in the last decade to expand its operations. In addition to 11 exploration and land-based production plants and 19 off-shore platforms in the northern Adriatic that it jointly owns with Italy’s ENI SpA and Edison SpA, INA has production facilities in Syria, Egypt and Angola.

New Projects

The company this year plans to increase output from its existing fields and take new projects abroad, Aldott told reporters in Zagreb, adding the company is also “examining acquisition possibilities.”

The Zagreb-based refiner may also participate in Croatia’s tender for oil and gas research in the Adriatic Sea, expected to be announced after April.

“Depending on the size of blocks offered and economic conditions, it would be good to participate in the tenders, probably with partners,” Aldott said.

Mol owns 49.1 percent of the Zagreb-based refiner, while the Croatian government holds a 44.84 percent stake. In the last two years, Croatia has attempted to increase its influence in INA, after Mol won controlling rights in 2009.

The two sides have been in talks over the company’s future since September and both have filed arbitration claims. Mol said on Oct. 3 it may consider selling its stake in the company, while Croatia said on Jan. 31 it may also consider looking for a new partner.

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