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Orlen Group doubles profits in 2022 in post-merger results

The Polish Orlen Group (PKN Orlen) has reported 21.5 billion złotych (4.5 billion euros) in net profits and revenue of 278.5 billion złotych (59.4 billion euros), doubling its results in both areas compared to the previous financial year (2021).

The company has also reported a LIFO-based EBITDA of 38.7 billion złotych (8.26 billion euros), an increase from 14.2 billion złotych (3.01 billion euros) in 2021.

The Orlen Group became the biggest energy company (by revenue and customer base) in Central and Eastern Europe (CEE) following its merger with two major players in the Polish energy market in 2022: PGNiG and LOTOS.

In the fourth quarter of 2022, PKN ORLEN continued to implement the merger remedies agreed with the European Commission (condition to its acquisition of LOTOS). Among them was the completion of a series of transactions with Saudi Aramco, including an agreement on crude oil supplies to the entire combined ORLEN Group. In addition, the ORLEN Group acquired and began to rebrand 79 fuel stations in Hungary, previously branded as Lukoil. The Group will purchase an additional 103 fuel stations in Slovakia and Hungary by mid-2024. In the fourth quarter of 2022, the ORLEN Group also launched a process of rebranding and integrating LOTOS fuel stations into its Polish network, all of them already operating under the ORLEN colours.

In the fourth quarter of 2022, the ORLEN Group’s retail segment earned EBITDA of 665 million złotych (13.8 million euros), with sales up 6 per cent in Poland, 5 per cent in the Czech Republic and 2 per cent in Lithuania. At the end of 2022, the ORLEN Group’s retail network comprised 3,097 fuel stations, a net year-on-year (y/y) addition of 216. The new stations were opened mainly in Poland and Hungary following the implementation of the merger remedies (LOTOS acquisition), as well as in Slovakia as a result of the launching and rebranding of self-service stations acquired from a local network. The ORLEN network across the region already comprises of a total 2,459 non-fuel outlets, including 1,847 in Poland, 334 in the Czech Republic, 173 in Germany, 29 in Lithuania, 17 in Slovakia and 59 in Hungary. Additionally, PKN ORLEN made progress in developing its alternative fuel infrastructure with a total of 637 alternative refuelling points including 493 in Poland, 125 in the Czech Republic and 19 in Germany.

The company reduced its debt by 7.2 billion złotych quarter on quarter (q/q) and 14.6 billion złotych (y/y), with the ratio of net debt to EBITDA at (-) 0.08x. In view of PKN ORLEN’s merger with LOTOS and PGNiG and stable financial position, the Group was assigned the highest rating in its history. Moody’s Investors Service upgraded PKN ORLEN’s rating to A3, while Fitch Ratings upgraded PKN ORLEN’s Long-Term Issuer Default Rating (IDR) by two notches, to BBB+.

Among its priority investments in the coming years, the Orlen Group looks to expand its biogas and bio-methane production portfolio with plans to build Poland’s first green biogas plant. A pilot plant, being built in Głąbowo (north-east Poland), is expected to produce over seven million cubic metres of bio-methane annually. The project is planned to start operations in mid-2024, with an estimated value of approximately 180 million złotych (33.5 million euros).

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