ZAGREB (Reuters) - Croatian energy group INA has decided to invest some 4.0 billion kuna ($593.74 million) to modernize its refinery in the northern Adriatic port of Rijeka, the company said on Thursday.
INA owns two refineries, one in Rijeka and a smaller one in the central Croatian town of Sisak, which is destined to become an industrial facility for bitumen production from 2021.
The Rijeka investment and the conversion of the Sisak plant is part of a plan to make INA’s refining business profitable.
“After 2023 INA expects an average annual increase in EBITDA of more than one billion kuna,” INA said.
“The works on the new facility will start soon and it is planned to become operational in 2023. The modernization will increase the production of profitable motor fuels and remove any need for their imports,” INA said in a statement.
In the first nine months of this year, INA reported revenues of 16.55 billion kuna, or 2% more than in the same period of 2018. Its net profit in the same period fell 36% year-on-year to 681 million kuna.
INA’s biggest single shareholder is Hungary’s energy group MOL, which owns slightly below 50%, while the Croatian government has slightly less than 45%.
Currently the Croatian government is looking at buying back INA’s shares owned by MOL and an adviser is doing due diligence in the company.
MOL and Zagreb have been at odds for years over management rights and investment policy at INA but the decision on the Rijeka refinery has been backed by them both.
($1 = 6.7369 kuna)
Reporting by Igor Ilic. Editing by Jane Merriman