Polish state-owned oil refiner and petrol retailer PKN ORLEN reported LIFO-based EBITDA of 1.6 billion złotys (350 million euros). Revenue came in at 22 billion złotys (4.8 billion euros) despite a year-on-year drop in oil throughput (down 7 per cent) and sales (down 8 per cent) and lower fuel consumption as a result of the crisis caused by COVID-19.
PKN ORLEN flexibly responded to fuel sales declines with such measures as adapting the schedule and accelerating scheduled maintenance shutdowns and eliminating imports of diesel oil.
“In the first quarter of this year, which was already affected to some extent by the crisis caused by the coronavirus pandemic, we delivered robust financial performance across all areas of our operations,” said Daniel Obajtek, President of the PKN ORLEN Management Board. “Thanks to our previous optimisation efforts, we are well prepared for various scenarios. We are monitoring the situation and flexibly responding to the changes in the market environment. PKN ORLEN’s financial condition allows us to continue the strategic growth projects and acquisitions with a view to enhancing the company’s resilience to macroeconomic factors. This is one of the objectives behind the acquisition of the ENERGA Group, now being finalised, and of Grupa LOTOS.”
Despite the solid LIFO-based EBITDA performance in all segments, the company reported a net loss of 2.2 billion złotys (482 million euros). The net result was directly affected by the decision to recognise an impairment of the upstream segment’s non-current assets and to write down inventories to current prices in the first quarter of 2020 consolidated financial statements.
The downstream segment delivered LIFO-based EBITDA of 901 million złotys (197 million euros). It was achieved especially on the back of higher sales of fertilisers despite a drop in sales of gasoline and diesel oil. The upstream segment reported LIFO-based EBITDA of 219 million złotys (48 million euros). Average hydrocarbon production increased by 7 per cent year on year. In Poland, work continued on the design and formal and legal aspects of the development of the Bystrowice, Bajera, Tuchola and Chwalęcin fields, as well as drilling of the Pławce and Dylągowa wells.
As announced, the Company proceeded with growth projects and acquisitions. The procedure to select the design provider for the offshore wind farm project in the Baltic Sea began and the construction of a Visbreaking unit in Płock was launched. As part of PKN ORLEN’s largest petrochemical asset development programme to date, a licence and front-end engineering design agreement was signed for the expansion of phenol production capacities. At the Trzebinia production plant, owned by ORLEN Południe, work continued on the construction of Europe’s largest unit for the production of eco-friendly propylene glycol. In March, the ORLEN Południe plant in Jedlicze started to produce hand disinfectant. The Group also consistently pursued the development of its fertilizer production capacities at ANWIL of Włocławek. It also completed the construction of the main part of the polyethylene unit in the Czech Republic.