NIS Releases Consolidated Business Results for the First Half of Year 2016

August 10, 2016

In the first half of year 2016, NIS has maintained profitability and generated the net profit of 3.1 billion RSD, despite the challenges in business operations, which primarily arise from low prices of crude oil in the global market. The achieved results are even more significant if one takes into account the fact that in the first three months, the net profit amounted to 261 million RSD. We have recorded success in a majority of operational indicators. The total turnover of petroleum products amounted to 1.552 thousand tonnes, which is an increase of 6 percent compared to last year. Foreign assets turnover increased by 38 percent compared to last year, while at the same time the share in the retail market in Serbia increased by 1 percent and now stands at 43 percent. The total volume of oil refining and semi-finished products is 1,750 thousand tonnes, which means an increase of 16 percent. Oil and gas production stood at 743 thousand equivalent tonnes, while at the same time hydrocarbon reserves increased by 3.7 percent. In addition, electricity production reached 74,336 MWh, or 27 percent more than in the first half of year 2015. In the same period, NIS Group’s direct and indirect tax liabilities amounted to 76.3 billion RSD, which is 13 percent increase compared to the same period in 2015. In the first half of this year, in cooperation with renowned international partners, we also continued preparations for the implementation of the Company’s strategic investment projects, such as the “Bottom of the Barrel” project in Pancevo Oil Refinery. Also, the activities continued on the preparation of the project of cogeneration plant (TE-TO) Pancevo, which will be implemented in cooperation with "Gasprom energoholding". Nonetheless, the long-term crisis in the oil sector has left traces on the Company's results for the first half of 2016. EBITDA (earnings before interest, income taxes, depreciation and amortisation) at the year-half totalled in 13.2 billion RSD, which is 37 percent less compared to the same period in year 2015. As a socially responsible company, NIS has declared 2016 as the year of HSE (Health, Safety, Environment) because the care about the health and safety at work and environmental protection are our absolute priorities. In the first six months of this year significant results were achieved in this field. Thus, the indicator of injuries with lost days (LTIF) declined by 51 percent compared to the first half of last year. The number of traffic accidents from the RAR (Road Accident Rescue) category has been reduced by the same percent. On the occasion of release of results from the first half of 2016, Kirill Kravchenko, NIS CEO, stated: "The righteousness of the path on which NIS has embarked itself in the circumstances of global crisis in the oil and gas industry has been once again validated by the good results achieved in the first half of 2016. NIS has found a response to the extended crisis in the oil and gas sector in the continuation of a consistent implementation of programs for increase of operational efficiency in all business areas, whose effect in the first half of 2016 amounted to 4.4 billion RSD. Also, we have not abandoned any key investment projects and, despite the crisis, in the first six months of 2016, the value of our investments is threefold the amount of our net profit i.e. total of 9.1 billion dinars. I would particularly point out that our focus remains on HSE. As in any large international company, we will strive to make HSE policy in NIS the basis of all processes, from the selection of potential partners to critical business decisions. In this manner not only do we care about the environment and employees, but also contribute to better business results of the Company.