NIS delivers higher Q1 2026 profit under US licensing limits and weaker refining volumes

Serbia’s NIS Group said it generated stronger earnings in the first quarter of 2026 even as it operated under unusually tight conditions linked to short-term licensing restrictions issued by the US Department of the Treasury. The environment weighed on refining and sales activity, but profitability held up—an outcome investors will likely view as a test of how resilient cash generation can remain when market access and operating flexibility are constrained.

Licensing restrictions hit volumes, but earnings stayed positive

According to the company, the restrictions had a noticeable impact on both financial and operational performance. In particular, NIS faced lower volumes of oil refining and petroleum product sales compared with the same period last year, alongside tightened operating conditions.

Even so, EBITDA for Q1 2026 remained positive at approximately €94 million. Net profit was about €24 million, representing an 87% year-on-year increase.

Profit supported by inventory costs and higher oil prices

NIS said the rise in net profit was mainly supported by cheaper oil inventories and a firmer global price backdrop. The average Brent crude price in the quarter was $80.6 per barrel—around 7% higher than in Q1 2025—suggesting supportive but still volatile market dynamics.

Investment, cash flow and public obligations remain substantial

During January–March, the Group invested around €54 million, with the largest share directed toward oil and gas exploration and production. Operating cash flow totaled approximately €143 million.

At the same time, accrued taxes and other public obligations were reported at about €376 million. For investors assessing near-term risk, this combination underscores that earnings strength does not eliminate ongoing financing needs tied to taxes and public payments while capital is still being deployed into upstream activity.

Operational output steady despite pressure

NIS reported total oil and gas output of 280.3 thousand tons. Refining of crude oil and semi-finished products reached 642.8 thousand tons, while petroleum product sales were 592.2 thousand tons. Electricity generation stood at 40.5 GWh—indicating that production levels remained broadly steady even as volumes for refining and sales were lower than a year earlier.

Focus going forward: supply continuity, discipline and workforce stability

Looking ahead, NIS said it will prioritize uninterrupted market supply, maintain financial discipline, and preserve employee stability through the rest of the year. The guidance points to a cautious approach designed to sustain operations in a complex environment where licensing constraints could continue to influence performance.