Croatia's largest fertiliser company Petrokemija generated a net profit of only 19 million kuna (€2.5m) over the first nine months of 2021, or 94 percent down from 315 million kuna (€42m) in the same period of 2020, state agency Hina reported, citing company's financial statement released on Thursday.

Petrokemija’s result for the first nine months of this year “was affected by increased prices of natural gas, higher carbon emission allowance prices, and lower demand. The negative effects were partially offset by higher selling prices of mineral fertilizers and the efficiency measures implemented,” CEO Davor Zmegac said commenting the report.

Operating revenue totaled 1.5 billion kuna (€200m), or 7.0 percent up from the same period in 2020. Sales revenues increased by 6.0 percent to 1.49 billion kuna (€198m), fueled mainly by the increase in prices of mineral fertilisers on the market, which in turn was due to higher prices of natural gas on the European markets.

The company said that prices of natural gas on the European markets had gone up 249 percent on average, while carbon emission allowance prices had increased by 129 percent following a new EU directive aimed at reducing CO2 emissions.

Operating expenditure rose by 38 percent to 1.49 billion kuna (€198m). Earnings before taxes without one-off items was 141 million kuna (€18.7m), down by 65 percent year-on-year, and net profit fell by 94 percent to 19 million kuna (€2.5m). Capital investments rose by 217 percent to 91 million kuna (€12m).

Based in the town of Kutina, Petrokemija was founded in 1968 and is a major exporter of fertilizer that with closer to 1,600 employees.

(€1 = 7.52 kuna)