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Serbia: GazpromNeft Oil industry Co NIS started 2015 with loss

The loss of the Serbia Oil company in the first three months of this year is almost five billion dinars, and it is not unexpected for the experts.

However, this raises questions about the future company plans; it is also often mentioned sale or departure of the current owners. In the NIS deny it.

The fall in profits in 2014th, then the loss in the first quarter of this year immediately raises the question whether the majority owner NIS may, due to lower profitability of their investments, change its plans.

NIS had more than 40 billion dinars of profit in 2012th and 2013th and it decreased last year by more than 40 percent – to 27.8 billion dinars.

This year has not started better. In the first quarter, it has been recorded a loss of 4.7 billion dinars, while in the same period last year NIS had a profit of 8.6 billion.

In the company said that profit declines primarily due to falling crude oil prices and the dollar strengthening, although the drop in demand is not without influence. But as they say, it will not affect their plans.

For the majority shares owner it is essential NIS further development in two directions – oil and gas exploration and production and development and improvement of the retail network in Serbia and the region.

Despite the results in the first quarter, NIS investments in the first three months of 2015th amounted to 7 billion dinars.

The company will not abandon key investment projects in 2015th and it will continue to increase investment in oil and gas reserves and innovation in their business.

There is also the reaction of investors to the stock market.

“According to the shares prices moving, we can say that the pressure was greater on the sales side because everyone expected that NIS would have a lower profitability this year and it happened in the first quarter. After the first quarter it had not been recorded a greater drop in shares, they have stabilized at about less than 700 dinars, which says that a lot of investors considered these factors as short-term”, said broker Nenad Gujacic.

Losses, say in NIS, will not change the plans of the majority owner. What, however, are the plans of the Serbian government, the minority partner?

It is a pity that the state has no concept in its management of the NIS. Specifically, the percentage of the majority investor increases and it seems to me that the Government has no concept of what it wants.

Many companies, including the Croatian INA or Romanian Petrom suffered a drop in profits or losses. Also, the decline in oil prices has cost thousands of workers of their workplace for the last year.

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