INA Industrija nafte d d : 28.10.2022. – FR_Group_Q3_2022_ENG

INA GROUP

Q3 & Q1-Q3 2022

FINANCIAL REPORT

Zagreb, October 2022

Q3 & Q1-Q3 2022 REPORT

INA GROUP CONSOLIDATED

INA Group (ZB: INA-R-A; www.ina.hr) announced its Q3 and Q1-Q3 2022 results. This report contains unaudited consolidated financial statements for the period ending 30 September 2022 as prepared by the Management in accordance with the International Financial Reporting Standards.

Contents
Management discussion and analysis: INA Group financial results .................................................................................	3
Financial and operational highlights .............................................................................................................................	3
President of the Management Board comment ............................................................................................................	4
Exploration and Production...........................................................................................................................................	5
Refining and Marketing, including Consumer Services and Retail...............................................................................	5
Main external parameters .............................................................................................................................................	7
Condensed Consolidated Statement of Profit or Loss ......................................................................................................	8
Condensed Consolidated Statement of Financial Position ...............................................................................................	9
Condensed Consolidated Cash Flow Statement ............................................................................................................	10
INA Group Summary Segmental Results of Operations.................................................................................................	11
Financial overview and notes..........................................................................................................................................	12
Special items ...................................................................................................................................................................	13
Financial instruments and risk management ..................................................................................................................	13
Changes in equity ...........................................................................................................................................................	13
Related party transactions ..............................................................................................................................................	14
Management representation ...........................................................................................................................................	14

2

Q3 & Q1-Q3 2022 REPORT

INA GROUP CONSOLIDATED

Management discussion and analysis: INA Group financial results (IFRS)

Q3 2021	Q3 2022	HRK mln	Q1-Q3 2021	Q1-Q3 2022	%
6,978	11,659	Net sales revenues*	16,248	27,233	68
1,102	1,897	EBITDA (1)	2,341	4,665	99
1,102	1,897	EBITDA excl. special items(2)	2,341	4,665	99
1,052	2,274	CCS EBITDA excl. special items(2)	2,109	4,716	124
700	1,469	Profit/(loss) from operations	1,153	3,440	198
700	1,469	Profit/(loss) from operations excl. special items (2)	1,153	3,440	198
650	1,846	CCS Profit/(loss) from operations excl. special items(2)	921	3,491	279
(35)	3	Net (loss)/profit from financial activities	128	(81)	n.a.
563	1,233	Profit/(loss) for the period attributable to Owners of the Company	1,097	2,769	152
563	1,233	Profit/(loss) for the period excl. special items (2)	1,097	2,769	152
758	1,705	Simplified Free Cash Flow (3)	1,206	2,801	132
699	1,748	Net operating cash flow	1,564	1,113	(29)
		Earnings per share
56.3	123.3	Basic and diluted gain/(loss) per share (HRK per share)	109.7	276.9	152
1,639	1,919	Net debt	1,639	1,919	17
13.5	13.1	Net gearing (%)	13.5	13.1
294	569	CAPEX total	903	1,915	112
253	552	Domestic	753	1,835	144
41	17	International	150	80	(47)
Q3 2021	Q3 2022	USD mln (4)	Q1-Q3 2021	Q1-Q3 2022	%
1,098	1,564	Net sales revenues*	2,580	3,812	48
173	254	EBITDA (1)	371	655	76
173	254	EBITDA excl. special items(2)	371	655	76
166	305	CCS EBITDA excl. special items(2)	335	658	97
110	197	Profit/(loss) from operations	183	481	164
110	197	Profit/(loss) from operations excl. special items (2)	183	481	164
102	248	CCS Profit/(loss) from operations excl. special items(2)	146	485	233
(6)	0	Net (loss)/profit from financial activities	21	(11)	n.a.
89	165	Profit/(loss) for the period attributable to Owners of the Company	174	387	122
89	165	Profit/(loss) for the period excl. special items (2)	174	387	122
119	229	Simplified Free Cash Flow (3)	191	385	102
110	234	Net operating cash flow	249	148	(40)
		Earnings per share
8.9	16.5	Basic and diluted gain/(loss) per share (USD per share)	17.4	38.7	122
255	247	Net debt	255	247	(3)
46	76	CAPEX total	144	273	90
40	74	Domestic	120	262	118
6	2	International	24	11	(52)

* Related to Revenue from contracts with customers

1. EBITDA = EBIT + Depreciation, amortization and impairment (net)
2. In Q1-Q3 2021 and Q1-Q3 2022 there were no special items impacting the result
3. Simplified free cash flow = CCS EBITDA excluding special items - CAPEX
4. In converting HRK figures into US Dollars, the following average CNB (HNB) rates were used: as at 31 December 2021 - 6.6435 HRK/USD; as at 30 September 2021 - 6.4266 HRK/USD; as at
   30 September 2022 - 7.7681 HRK/USD; for Q1 2021 - 6.2739 HRK/USD; for Q1 2022 - 6.7147 HRK/USD; for Q2 2021 - 6.2464 HRK/USD; for Q2 2022 - 7.0649 HRK/USD; for Q3 2021 - 6.3528 HRK/USD; for Q3 2022 - 7.4560 HRK/USD

Q1-Q3 2022 financial and operational highlights

Energy market turmoil driven by the geopolitical risks and supply issues continues to keep the hydrocarbon prices at elevated levels, with Brent prices above USD 100 per barrel and CEGH gas price fluctuating, but shortly exceeding even 200 EUR/MWh during Q3 2022. In such environment, entire oil and gas industry delivers strong results.

INA Group CCS EBITDA excl. special items in first nine months 2022 amounted to more than HRK 4.7 billion while net profit exceeded HRK 2.7 billion. Results are stronger in all segments with Exploration and Production naturally being the main cash generator, mainly due to the strong environment. Exploration and Production revenues amounted to HRK 5.4 billion with EBITDA HRK 3.9 billion. Natural decline of production continues, but the effect of ongoing Offshore drilling campaign is already visible in production volumes. Ongoing investment cycle in Refining and Marketing incl. Consumer services and Retail segment caused negative cash flow although the operating results improved. Various regulatory restrictions in Retail had a negative impact on the result but on the other side the refining margins improved leading to better overall results with CCS EBITDA excl. special items of almost HRK 1.3 billion.

Investment activities continue to be on high levels, throughout the segments, more than doubling compared to first nine months 2021. Refining and Marketing, with the Residue Upgrade Project remain the biggest investment, but the ongoing Offshore drilling campaign is also a significant development project, with the effect of increase production already showing.

Despite the strong operative results, operating cash flow of the company is lower compared to last year, due to major investments and large financing needs for the working capital.

3

Q3 & Q1-Q3 2022 REPORT

INA GROUP CONSOLIDATED

President of the Management Board comment

Mr. Péter Ratatics, President of the Management Board comments on the results:

• Third quarter of 2022 brought continuation of worldwide energy market volatility, with gas prices oscillating and oil price at continued high level. Questionable security of supply in some countries, caused by the global turmoil, alongside with elevated price level led to numerous regulatory interventions throughout the world. In such environment INA's result stayed strong, primarily due to the
  Exploration and Production, the strongest cash generator in the conditions of high hydrocarbon prices. Ongoing Offshore drilling campaign already brought some results with two new wells put into production, although further development is needed and underway in order to mitigate the natural production decline, something expected with the mature portfolio of INA.

Compared to the same period last year, refining margins are greatly improved, which led to improved Refining and Marketing operations, despite the fact that increased energy prices also burden their result. Captive market sales also increased, with the results under pressure with the various limitations on margins. Nevertheless, the safe supply of the market remains INA's priority. Excellent tourist season and consumption assisted the growth of Retail volumes in fuel, with third quarter amounting to more than 40% of volumes in the first nine months 2022. Alongside with fuel, a non-fuel growth continued due to expansion of offer and improved sales.

Although the external environment of high hydrocarbon prices enabled us to increase our income, it is important to emphasize that a large part of INA's profit is returned to investments, so the period of strong investments continued. Our CAPEX more than doubled compared to the first nine months of 2021. The Rijeka Refinery upgrade project continues as INA's largest investment in history, the goal of which is to ensure the long-term profitability of INA's refining, on top of already ensured security of supply. The aforementioned offshore drilling campaigns will ensure an increase in natural gas production.

It is ungrateful to predict what will the future bring since the volatile markets, the regulatory measures that are hard to foresee, the rising inflation and probable recession bring a higher level of uncertainty. Therefore, INA will continue to continuously improve its operations to strengthen its position for the years ahead."

4

Q3 & Q1-Q3 2022 REPORT

INA GROUP CONSOLIDATED

Exploration and Production*

Q3 2021	Q3 2022 Segment IFRS results (HRK mln)	Q1-Q3 2021	Q1-Q3 2022	%
1,031	2,440	Net sales revenues	2,588	5,400	109
652	1,832	EBITDA	1,563	3,902	150
652	1,832	EBITDA excl. special items **	1,563	3,902	150
470	1,616	Profit from operations	1,032	3,322	222
470	1,616	Profit from operations excl. special items **	1,032	3,322	222
516	1,675	Simplified Free Cash Flow***	1,206	3,438	185
136	157	CAPEX	357	464	30

• Exploration and Production refers to the Upstream of INA, d.d. and following subsidiary: Adriagas S.r.I. Milano
• In Q1-Q3 2021 and Q1-Q3 2022 the result was not impacted by special items
• Simplified free cash flow = EBITDA excluding special items - CAPEX

Q3 2021	Q3 2022	Hydrocarbon production (boe/d)	Q1-Q3 2021	Q1-Q3 2022	%
12,567	12,267	Crude oil production (boe/d)	12,586	12,261	(3)
10,383	10,097	Croatia	10,332	10,096	(2)
1,703	1,613	Egypt	1,778	1,587	(11)
481	557	Angola	476	578	21
13,325	13,062	Natural gas production (boe/d)	13,767	12,949	(6)
3,139	3,640	Croatia - offshore	3,356	3,494	4
10,187	9,422	Croatia - onshore	10,410	9,455	(9)
930	886	Condensate (boe/d)	1,001	909	(9)
26,822	26,214	Total hydrocarbon production	27,354	26,119	(5)
Q3 2021	Q3 2022	Average realized hydrocarbon price	Q1-Q3 2021	Q1-Q3 2022	%
70	137	Total hydrocarbon price (USD/boe)*	58	110	91

* Calculated based on total sales revenue including natural gas internal selling price as well

Q1-Q3 2022 vs. Q1-Q3 2021

Key drivers

• Higher prices impacted sales revenues positively by HRK 2.601 million. Increased gas prices added HRK 1.729 million positive effect, while 56% higher Brent price brought an additional HRK 718 million crude oil and condensate sales revenues with other products positive impact on revenues in the amount of HRK 154 million
• Gas sales towards HEP regulated at fixed price with negative impact expected from Q4 2022
• Despite of successfully performed actions in the scope of Production optimization project and positive effect of putting into production two new Offshore wells (Ika B & Marica D), Croatian production decreased as a result of:
  o natural decline on Onshore oil fields and higher water cut on major gas fields o natural decline on major gas condensate fields in Deep Podravina
• International crude oil production:

1. Egypt: lower well performance at all concessions

1. Angola: production is higher with the increase of INA share on Block 3/05 by 1.3% due to exit of the partner

Capital expenditures

Q1-Q3 2022 (HRK mln)	Croatia	Egypt	Angola
Exploration	1	1	-
Development	325	66	2
Other	69	-	-
TOTAL	395	67	2

Higher CAPEX level compared to Q1-Q3 2021 mainly as a result of development activities on Croatia Offshore drilling campaign and on Croatia Onshore. Main activities in Q1-Q3 2022 were related to:

Croatia Exploration:

1. Drava-03:Permitting and preparation for drilling underway, drilling postponed from 2022 year-end to 2023 o SZH-01: Seismic interpretation finished, attribute analysis, geochronological study in progress
   o DI-14: External G&G study completed, final G&G in-house study completed

Croatia Development Offshore:

1. Ika B-1 R well: Initial production started on March 3rd, 2022

1. Marica D Dir well: Hook up completed. Trial production started on May 26th, 2022. Preparation for authority technical

inspection in progress

1. Drilling and well testing of Ilena-2 finished, next to be drilled is Ida D-1o Preparatory activities for drilling of Ira-1 dir & Ida D-2 ver in progress

Croatia Development Onshore:

1. In total 45 workovers were performed

1. Dravica-3:Drilling finished on May 31st, 2022, the well is negative. Preparation of PreFEED study and conceptual designs

for surface ongoing

1. EOR Šandrovac: CO2 injection phase finished; water injection phase started in April and it is ongoing

Egypt

1. Egypt, North Bahariya concession: 7 development wells drilled (3 producers and 4 water injectors), all 3 oil wells put in production. Rig audits ongoing, drilling campaign will continue in October

5