ZAGREB, 29 April, 2021 - INA posted the net profit of HRK 50 million in the first three months of 2021, according to the latest quarterly financial report released by this leading Croatian oil group on Thursday.

For the sake of comparison, in the Q1 2020, INA registered a loss of HRK 178 million.

In the first three months of 2021, the group's revenues totalled HRK 4.17 billion, rising by 0.6% on the year, whereas the expenditures contracted 19.7% to 4.11 billion kuna.

The statement reads that "the beginning of 2021 was marked by a more favorable external environment compared to 2020, which was one of the most challenging years for oil & gas industry."

"Although world economy is still far from recovery and demand is limited, impact of gradual easing of COVID-19 restrictions is visible," it says.

"EBITDA reached HRK 467 million and Profit for the period amounted to HRK 50 million, in contrast with the losses in 2020 caused by a large drop in hydrocarbon prices and consequent negative inventory revaluation," INA reported in its financial statement.

"Exploration and production benefited from the increased hydrocarbon prices but natural decline continued with production level below 28 th boe/d, 12% lower compared to Q1 2020. This drove the segment’s EBITDA to HRK 401 million, 5% lower compared to Q1 2020."

In Q1 2021, INA entered a new concession in Egypt, following efforts to partly compensate for the natural decline of production on domestic fields.

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ZAGREB, June 24, 2020 - The Constitutional Court has ruled that former prime minister Ivo Sanader did not have his rights violated by being placed in investigative custody after a non-final ruling in the INA-MOL case, even though he was already behind bars after a ruling in the Planinska case became final.

The Constitutional Court thus dismissed Sanader's complaint about the detention order which was issued after in late 2019 he was found guilty of taking €10 million in bribes from the CEO of the Hungarian energy group MOL, Zsolt Hernadi.

In addition to six years in prison, he was also sentenced to so-called obligatory investigative detention which is given for non-final sentences longer than five years.

Sanader first appealed to the Supreme Court, which found that investigative detention in the INA-MOL case should begin after he served his six-year prison term in the Planinska case.

ZAGREB, May 1, 2020 - The three biggest trade unions in the INA oil group have asked Prime Minister Andrej Plenković to get INA owners - the government and the Hungarian oil company MOL - to give up the payment of the dividend for 2019.

The also urged the government to consider the possibility of including INA and its companies in a set of measures aimed at preserving jobs.

"The financial reports clearly show the gravity of the consequences of the economic crisis and its effects on the INA Group, jeopardising more than 9,000 jobs," one of the unions said in a press release.

Another union said that the proposal to cover INA with the government measures that already benefited 84,000 employers was reasonable.

The unions demand the preservation of jobs, investments and economic activity.

 The INA Group generated HRK 3.95 billion from sales in the first quarter of 2020, which was down by 7% in comparison to the corresponding period of 2019, this leading oil and gas company stated on Thursday.

Furthermore, the company's financial statement shows that INA had a net loss of HRK 798 million in Q1 2020 as against a profit in the same period in 2019.

"Operations of INA, d.d. in Q1 2020 have witnessed unprecedented market dynamics, particularly at the end of the quarter. The outbreak of the COVID-19 pandemic coupled with the disagreement within OPEC+ have led to a parallel supply and demand shock on global oil markets leading to a massive drop in oil & gas prices," reads a press release on INA's web site.

Additionally, INA experienced a cyber-attack which created operational challenges but core operations and market supply were not interrupted and the business continuity was ensured, said INA.

INA, d.d. revenues recorded a 6% decrease in line with the mentioned market conditions while the reported result turned negative and amounted HRK 531 million, primarily due to inventory revaluation driven by external environment.

"Exploration and Production EBITDA excluding special items decreased by 22% to HRK 419 million mainly caused by 11% lower realized hydrocarbon price and the natural decline in hydrocarbon production, primarily Croatian natural gas volumes."

Refining and Marketing including Consumer Services and Retail EBITDA excluding special items, hit by external drivers, was negative in the amount of HRK (978) million. Consumer Services sale quantities were only down by 4% in Q1, as the biggest drop in demand occurred at the end of the reporting period.

CAPEX was significantly lower in Q1 2020 compared to Q1 2019 due to the high base effect, as a major turnaround in the Rijeka refinery in 2019 boosted investments last year, INA said in the statement.

More news about INA can be found in the Business section.

ZAGREB, March 17, 2020 - The Council for INA on Tuesday accepted a report by its investment consultant on the course of due diligence in the Croatian oil company, defining the course of further activities for the possible purchase of INA shares held by the Hungarian oil and gas group MOL.

An analysis by the investment consultant on company's operations and value is expected in the second quarter, the government said in a statement.

The INA Council, an advisory body tasked with providing guidelines, taking action and putting forward proposals to the government regarding preparations for, implementation and financing of the possible purchase of MOL's stake in the company, held its 11th meeting today under the chairmanship of Prime Minister Andrej Plenković.

Representatives of the Lazard investment consultant and other professional consultants submitted a report to the Council on the course of due diligence in INA via video link.

"The Council accepted the report and determined the course of further activities in the process of the possible purchase of MOL's interest in the company, as part of which an analysis by the investment consultant of the company's operations and value can be expected in the second quarter of this year," said the government.

More INA news can be found in the Business section.

ZAGREB, December 31, 2019 - Foreign news agencies on Monday carried reports of a non-final verdict against former Croatian prime minister Ivo Sanader and Hungarian MOL energy group executive Zsolt Hernadi, sentenced for bribery to six and two years in prison respectively, stressing that the Croatian court did not accept conclusions by an independent UN commission.

Earlier on Monday the former Croatian prime minister and the MOL executive director were found guilty of taking and receiving a bribe in the INA-MOL case.

Explaining the retrial verdict, Zagreb County Court judge Maja Štampar Stipić said Sanader had arranged with Hernadi to give MOL controlling rights in its Croatian peer INA in exchange for €10 million. In doing so, Sanader used his position and authority as prime minister to make it seem that it was necessary to divest INA's gas business and change the shareholders' agreement, the judge added.

The Hungarian news agency MTI carried MOL's comment in which the Hungarian company expressed dissatisfaction with the verdict, saying that Hungarian courts as well as the UN Commission on International Trade Law (UNCITRAL) established that the law had not been broken in the INA-MOL case.

MOL also claimed that this was not the first unfair trial in Croatia, dismissing the corruption charges and noting that it would continue to defend itself against unfounded accusations.

The Serbian news agency Tanjug, too, carried the comment by MOL, which also recalled that the verdict to Sanader and Hernadi was based on the testimony of only one witness who during the retrial had proved entirely unreliable.

Tanjug also reports that Hernadi continues to enjoy the trust of all MOL Group boards.

The Beta news agency reported that the verdict against the once most powerful Croatian politician and the Hungarian executive was announced in their absence as Hernadi is beyond the reach of Croatian authorities while Sanader stayed in Zagreb's Remetinec prison.

Agence France-Presse quoted prosecutor Tonči Petković as saying that as the highest state official, Sanader had jeopardised Croatia's vital economic interests.

AFP says that Sanader is the highest political official convicted of corruption since Croatia declared independence from the former Yugoslavia in 1991, but also that the fight against corruption was one of the key factors for Croatia's accession to the EU in 2013.

Reuters quoted Zagreb County Court president Ivan Turudic as saying that a warrant had been issued for Hernadi's arrest and that Hungary should act on it.

The agency recalls that the verdict may be appealed against but also stresses that it is a new chapter in a legal saga that has been going on for more than a decade.

In the initial trial Sanader was sentenced to eight and a half years in prison. Apart from being tried for receiving a bribe from Hernadi, he was also tried for war profiteering in the Hypo case, namely for receiving a commission from that bank which granted Croatia a loan at the time of the Homeland War. In a retrial he was convicted to two and a half years for that crime, but the time spent in custody was credited to his sentence so he did not have to return to prison.

However, he was again placed in custody in April after the Supreme Court increased his sentence in the Planinska case so he was again behind bars at the time when the verdict in the INA-MOL case was announced.

The trial against Sanader in the Fimi Media case is still under way. In that case, he was originally sentenced to nine years' in prison pending appeal, but the Supreme Court quashed the verdict.

More news about Ivo Sanader can be found in the Politics section.

As Index writes on the 30th of December, 2019, former Croatian Prime Minister Ivo Sanader (HDZ) and Hungarian MOL's main man Zsolt Hernádi have been found guilty of accepting bribes in the INA-MOL case today, for which Ivo Sanader was sentenced to six years in prison, and Hernádi to two years in prison.

Explaining the final verdict, Zagreb County Court Judge Maja Štampar Stipić said that ex PM Ivo Sanader had agreed with Hernádi that he would leave the decisive vote on INA's business to Hungary's MOL for the sum of 10 million euros. In doing so, he used his position and the authority of the Prime Minister to show that it was necessary to separate the gas business and change the inter-share agreement.

The non-binding verdict in the retrial was announced in front of an empty bench for the defendants because Hernádi was unavailable to the Croatian judiciary while Ivo Sanader remained in Zagreb's Remetinec prison.

As he recently underwent surgery, which in the court's view was not necessary, Ivo Sanader was not present at the closing speeches in the case. USKOK (Croatian State Prosecutor's Office for the Suppression of Organised Crime and Corruption)  then concluded that Ivo Sanader threatened the state's interests by receiving bribes from co-defendant Hernádi, while their defense, on the other hand, argued that there was no basis for the conviction.

According to the final verdict, Robert Ježić's company, which admitted that Ivo Sanader was paid half of the agreed bribe through them, should pay back five million euros to the Croatian state.

Lawyer Jadranka Sloković: We knew it would turn out like this:

"We're not surprised the whole proceeding went this way. The rights of the defendants and the defense were violated during the proceedings. We'll write an appeal, we knew the outcome much earlier. This is a court failure, almost all witnesses were rejected. The verdict is based on the testimony of a person who said she spent all of the money entirely.

Our October appeal was only submitted to the Supreme Court in November, which largely determined the outcome of the trial. I believe the Supreme Court will have a lot of work to do.

The court claims Sanader could have cancelled the operation, but he has been going through court proceedings for 10 years now, he couldn't postpone it because he would then be charged again with obstruction of the procedure,'' Jadranka Sloković said after the verdict.

"Ivo Sanader's expectations are such that he expects nothing from the Zagreb County Court. He's still in rehab," Sloković said.

"We're pleased with what we've achieved. All that we found in the first trial has now been confirmed. As far as the sentence is concerned, it is too mild and we will appeal it," a statement from USKOK said.

Make sure to follow our dedicated politics page for more.

As Darko Bicak/Poslovni Dnevnik writes on the 13th of December, 2019, according to INA, the decision on a heavy-waste treatment facility comes one year after the announcement of INA's R&M New Direction 2023 program, which aims to transform INA's refining system to generate profits instead of losses.

Today, INA made a decision to invest a massive four billion kuna in a heavy waste treatment plant at the Rijeka Oil Refinery. As was explained during an extraordinary press conference in Zagreb, the company's supervisory board gave its prior approval for the construction of the Heavy Duty Processing Facility in Rijeka, and INA's management board then made a unanimous decision on the investment. Works on the new plant will begin early next year, they say, and it is expected to start operating at some point in 2023.

Sándor Fasimon, CEO of INA, said the decision on the heavy-duty processing plant marks an important step in the implementation of the R&M New Direction 2023 program, as well as an important moment in the company's history as it is the largest investment INA has made in decades.

"With this decision, the Rijeka Oil Refinery will be transformed into a modern European refinery while ensuring that INA maintains a leading position on the market. It's a major investment that will significantly affect the company's operations in the future," said Fasimon.

The chief executive officer of the MOL Group and the deputy chairman of INA's supervisory board commented that this decision confirms the MOL Group's commitment to INA. "By constructing a heavy waste treatment plant, we'll significantly increase the complexity and efficiency of the Rijeka refinery. I firmly believe that this investment will have a significant positive impact on the company's profitability in the future,'' said Molnar.

Tomislav Ćorić, Minister of Environment and Energy, said that the announcement of about four billion kuna in investment over the next three years is the most wonderful Christmas gift to Croatia that could be expected.

''Today's decision to launch the modernisation project of the Rijeka Oil Refinery is a major step forward. This is one of the biggest investments in our energy sector and I'm glad that it was realised precisely during the term of this current government. This investment will improve the product structure of Rijeka, increase profitability and improve the company's competitiveness in the field of environmental protection by significantly reducing CO2 and other harmful gases,'' stated Minister Ćorić.

A year ago, Prime Minister Andrej Plenković promised us a "Christmas present" in the form of an announcement that Croatia would go ahead with the purchase of MOL's stake in INA.

According to INA, and as previously mentioned, the decision on this treatment facility comes one year after the announcement of the R&M New Direction 2023 program. The program includes the concentration of crude oil processing activities in the Republic of Croatia at the Rijeka Oil Refinery and, as part of this, the conversion of the Sisak Oil Refinery into an industrial centre that will cover the production of bitumen, which was approved in March this year and is set to launch in 2021.

Still to come is a logistics hub and, potentially, lubricant production and even a bio-component refinery. With the implementation of all activities covered by the INA R&M New Direction 2023 program, after 2023, INA expects an average annual EBITDA growth of over 1 billion kuna in total.

Make sure to follow our dedicated business page for much more.

ZAGREB, October 28, 2019 - INA Group's revenue in the first nine months of 2019 totalled 16.55 billion kuna, two percent more than in the same period of 2018 while the group's profit dropped by 36% to 679 million kuna, shows a financial report the group released on Monday.

CCS EBITDA excluding special items amounted to 2.397 billion kuna, improving 8% compared to the same period last year. The average oil prices decreased somewhat during the first nine months of 2019, therefore the reported EBITDA amounted to 2.208 billion kuna and profit amounted to 679 million kuna, the group said.

The group notes that the first nine months of this year were an intensive investment period.

"CAPEX increased by 69% compared to the same period last year and amounted to 1,541 million kuna, mainly driven by refining investments. Investments in Croatia amounted to 1,319 million kuna, more than double compared to the same period last year. Net gearing amounted to 21% with net debt at 3,036 million kuna," the group said.

Sandor Fasimon, President of the Management Board of INA, said in a comment that the company's intensive investments in the first nine months had started to show results.

"Total investments exceeded 1.5 billion kuna, majority of which was spent domestically. Rijeka refinery turnaround, as one of the largest ones in the company’s history, was completed. Numerous improvements implemented during this turnaround are already visible in the better production structure, with a higher share of profitable white products. This is also to be further improved with future expected projects, in line with the INA Downstream 2023 New Course program.

"Also, the increased level of Upstream activities in Egypt is starting to give results with a 23% increase of oil production in Egypt. This, together with the continuous workover activities in Croatia, currently stabilized the hydrocarbon production impacted with natural decline," Fasimon said.

More INA news can be found in the Business section.

ZAGREB, July 31, 2019 - The New York-based investment bank Lazard is the Croatian government's new consultant on the buyback of the Hungarian energy group MOL's stake in the INA oil company, Finance Minister Zdravko Marić told reporters in Zagreb on Wednesday after a meeting of the government's Advisory Committee on INA.

Marić recalled that a consortium of Morgan Stanley, Intesa Sanpaolo Group and Privredna Banka Zagreb had previously been selected as a consultant, but that disagreements had emerged over what should be included in the agency agreement, notably technical aspects of the hiring of consultants.

"We decided to conduct interviews with other bidders from the first round and we have selected a new consultant, Lazard," Marić said.

Environment and Energy Minister Tomislav Ćorić said that the decision on signing the agreement with Lazard would be formally adopted at a Cabinet meeting on Thursday.

Ćorić said that the new consultant's services could cost 9 million euro at most.

The agreement with Morgan Stanley, Intesa Sanpaolo Group and Privredna Banka Zagreb cost €8 million.

Ćorić said that due diligence could be completed in six months, and that the government would make its offer to MOL in the first quarter of 2020.

More news about INA can be found in the Business section.

ZAGREB, July 29, 2019 - Environment and Energy Minister Tomislav Ćorić said on Monday that information about a possible new government consultant for the buy-back of INA's shares from the Hungarian energy group MOL would be clearer after a meeting of the INA Advisory Committee on Wednesday.

Asked whether a new consultant would be selected in the process of buying back INA's shares, Ćorić said that the Advisory Committee was meeting on Wednesday and that after that the next steps would be known.

Last year the government selected the consortium of Morgan Stanley, Intesa Sanpaolo Group and Privredna Banka Zagreb (PBZ) to act as the government's investment advisor on the possible buy-back of INA's shares from MOL and the possible subsequent sale of those shares to a new strategic partner. The consortium's offer for this task was €8 million.

The Nova TV commercial television channel said on Sunday that the Advisory Committee would select a new consultant who would conduct a deep scan of INA and that the task could possibly be given to the Lazard firm.

Asked why the consortium failed to calculate INA's worth, Ćorić said that "disputes emerged regarding certain activities" and the task was not completed.

Ćorić asserted that it was realistic for the government to make an offer based on the results of the analysis and for the other side to then react to that bid. He added that a decision on the buy-back would only be known in the final phase.

"The buyer Croatia and the seller MOL have to agree on a price," he added.

In response to reporters' remarks that this could burden relations considering that the Hungarians wanted to be involved in the LNG Terminal on Krk island, Ćorić said that these were two separate matters. One refers to relations between Croatia and a private company whereas the matter of the LNG terminal refers to relations between the two countries.

"Croatia is interested in a partnership regarding the LNG terminal and not only with Hungary," he said, adding that Croatia wanted to retain a dominant role in the LNG terminal as its majority owner.

"We have a Hungarian bid to purchase 25% of the terminal. As far as we are concerned, negotiations on this matter are contingent primarily on the lease of the terminal's capacity," Ćorić said.

Asked whether the government was satisfied with the way INA was being managed, Ćorić said that the fact that the government wanted to buy back MOL's stake in INA spoke for itself.

In the meantime, communication has improved while in the future decisions regarding investments, primarily in the refinery business, are essential, he said.

More news about the INA-MOL issue can be found in the Business section.