NIS Group Q1 2025 presentation: Lower oil prices impact financial performance

Introduction & Market Context

NIS Group presented its first quarter 2025 financial results on April 30, highlighting the challenges posed by lower global oil prices. The company operated in a macroeconomic environment characterized by a 9% year-over-year decline in Brent oil prices, which averaged $75.7 per barrel during the quarter, down from $83.2 in the same period of 2024.

The presentation, delivered by Anton Cherepanov from the Function for finance, economics, planning and accounting, also noted currency pressures, with the USD/RSD exchange rate averaging 3% higher than in Q1 2024, creating additional headwinds for the Serbian oil and gas company.

As shown in the following chart of macroeconomic indicators affecting NIS Group’s performance:

Quarterly Performance Highlights

NIS Group reported declines across all key financial metrics in Q1 2025 compared to the same period last year. Sales revenue fell 16% year-over-year to 72.3 billion RSD, while EBITDA decreased 15% to 8.5 billion RSD. Net profit declined 16% to 1.5 billion RSD, reflecting the challenging market conditions.

The company’s operational performance in exploration and production saw total oil and gas output reach 277.5 thousand tons of oil equivalent, representing a 4% decrease from Q1 2024. During the quarter, NIS drilled 7 development wells and 1 exploratory well in Serbia, while putting 12 development wells and 1 exploratory well into operation.

The following image details the exploration and production performance:

In the downstream segment, the Pančevo Oil Refinery operated continuously to meet market demand, with total refining volume reaching 853 thousand tons. The refining operations generated an EBITDA of 2.1 billion RSD with capital expenditures of 1.1 billion RSD.

The refining performance is illustrated in this slide:

Detailed Financial Analysis

The company’s financial results reflect the challenging market environment, with all key metrics showing double-digit percentage declines compared to Q1 2024. Particularly notable was the 47% reduction in capital expenditures, which totaled 5.5 billion RSD compared to 10.5 billion RSD in the same period last year, suggesting a more cautious approach to investments amid lower oil prices.

The comprehensive financial comparison between Q1 2025 and Q1 2024 is presented in the following slide:

Despite the overall financial pressure, NIS maintained a strong position in the Serbian retail market with a 48% market share. Retail volumes in Serbia reached 203 thousand tons, and the sales and distribution segment generated an EBITDA of 2.5 billion RSD with capital expenditures of 1.2 billion RSD.

Strategic Initiatives

NIS Group continued to pursue strategic growth initiatives despite the challenging market conditions. The company acquired a new petrol station, Majdanpek 2, which will be rebranded under the NIS brand, and implemented the "Parcel machines" project for the Serbian Postal Services, diversifying its service offerings.

The company’s development projects in Serbia for 2025 are illustrated in the following map:

In the energy sector, NIS is advancing its renewable energy strategy with several photovoltaic power plant (PVPP) projects. These include installations at the petroleum product warehouse in Novi Sad (6.59 MW), rooftop solar at the Pančevo Oil Refinery, and projects in Smederevo and Jermenovci. Total (EPA:TTEF) electricity production in Q1 2025 reached 34.9 GWh.

The following slide details the company’s energy initiatives:

Forward-Looking Statements

While facing current market challenges, NIS Group appears focused on maintaining operational efficiency and strategic growth. The company’s continued investment in renewable energy projects signals a long-term commitment to diversifying beyond traditional oil and gas operations.

The reduction in capital expenditures suggests a more cautious approach to investment in the current lower oil price environment. However, the maintenance of market share and continued strategic acquisitions indicate the company is balancing short-term financial pressures with longer-term strategic objectives.

NIS Group’s stock (BELEX:NIIS) closed at 718 RSD as of the most recent trading data, within its 52-week range of 622 to 858 RSD, reflecting the market’s measured outlook on the company amid challenging industry conditions.

Full presentation:

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