Naftna Industrija Srbije (NIS) recorded a net profit of RSD 23.1 billion (€196.5 million) in the first nine months, compared with a loss of approximately €2.6 million a year earlier.
EBITDA increased to €508 million, from around €180 million, supported by higher crude oil prices, stronger refining margins, favourable inventory effects and cost controls. The recovery came despite US sanctions linked to the company’s majority Russian ownership and restrictions affecting its retail operations.
NIS continued operating under temporary licences issued by the US Treasury Department’s Office of Foreign Assets Control (OFAC) and reduced its bank debt by €182.1 million, strengthening its financial position.
Refining Margins Support Earnings Growth
Average Brent crude prices reached approximately $94 per barrel, compared with $70.9 per barrel in the corresponding period a year earlier. Higher prices supported upstream economics and refining profitability, while NIS also benefited from inventory acquired at lower prices.
These inventory effects contributed to reported earnings but do not necessarily represent a permanent improvement in operating performance. Future profitability will depend on refining margins, crude procurement costs, production efficiency and the ability to maintain operations under sanctions.
Retail Sales Fall as Wholesale Volumes Increase
Retail fuel sales declined 15%, reflecting restrictions on international bank card payments at NIS filling stations. The company continued accepting cash, Dina cards, instant payments and designated corporate payment instruments.
NIS’s share of Serbia’s retail fuel market decreased by 5.4 percentage points. By contrast, wholesale fuel volumes increased 12%, supported by disruptions at regional refineries, petroleum-product export restrictions and logistical difficulties caused by low water levels on the Danube. Higher wholesale sales partly offset weaker retail activity, but total petroleum-product sales still declined approximately 1% to 2.396 million tonnes.
Pančevo Refinery and Industrial Investments
NIS processed approximately 2.6 million tonnes of crude oil and intermediate products at its Pančevo refinery, increasing daily refining capacity to around 13,000 tonnes. The refinery depends on reliable crude deliveries, with the JANAF pipeline system in Croatia serving as a key supply route. Disruptions to transportation permissions, international payments or procurement could affect operations and domestic fuel availability.
Capital expenditure reached approximately €163 million, focused mainly on oil and gas exploration, production and refinery infrastructure. NIS completed a €32 million modernisation of the Pančevo industrial railway facility and launched a major overhaul of HIP Petrohemija. Oil and gas production totalled approximately 834,000 tonnes of oil equivalent, down 0.4%. Meanwhile, electricity generation from the company’s solar installations reached 12.4 GWh, approximately three times the previous comparable level.
Debt Reduction and Public Revenues
NIS reduced bank indebtedness from €539.5 million to €357.4 million, a decrease of 33.8%. Operating cash flow reached approximately €271 million, supporting the improvement in its balance sheet.
The company also reported accrued public-revenue obligations of approximately €1.45 billion, including taxes and other public charges. This figure represents accrued obligations rather than an equivalent amount of net tax payments collected by the state.
OFAC Authorisation and Ownership Remain Key Issues
NIS requested a new special OFAC licence to continue operations beyond the expiry of its previous authorisation. The earlier licence permitted refinery operations, crude oil imports, contractual obligations and financial settlements necessary to maintain fuel supplies.
Negotiations involving Hungarian energy company MOL and Russian shareholders over a potential ownership change remain important to resolving the sanctions restrictions. Any acquisition would require the necessary regulatory approvals and agreement between the parties.
The future ownership structure could influence refinery investment, regional fuel-market competition, financing and NIS’s position in European energy markets. A further OFAC licence extension had not been confirmed in the latest available reports. Despite stronger earnings and lower debt, NIS remains exposed to uncertainty over sanctions, international payments, crude supply and the continuity of its operations.
