On November 2, 2022, it happened registration of Orlen’s merger with PGNiG. IN consolidated financial statements for 2022, the group presented provisional values of acquired assets and assumed liabilities, which were not changed in subsequent reporting periods due to the ongoing valuation period.
On February 19, 2024 Orlen group finally completed the identification process carried out by independent experts and fair value measurement individual assets acquired and liabilities assumed.
Settlement of the merger with PGNiG
As a final result settlement of the merger transaction with PGNiG the profit from the bargain purchase decreased by PLN 1.5 billion compared to the provisional value of PLN 8.2 billion presented in the consolidated financial statements for 2022 and amounted to PLN 6.7 billion.
According to IFRS 3 principles the Orlen group retrospectively adjusted the provisional values of the acquired net assets to their fair values as if the accounting settlement of the merger with PGNiG had been completed on the acquisition date.
Consequently, the group also made verification of comparative information for previous reporting periods, which also affected the financial data of the Orlen group for 2023.
Consolidated operating result of ORLEN
Recognizing temporary adjustments to the value of acquired net assets to their fair values and settling them in subsequent reporting periods will increase consolidated operating result enlarged EBITDA amortization Orlen group for the period of 12 and 3 months ended December 31, 2023 by approximately PLN 7.6 billion and PLN 2.2 billion, respectively.
Consolidated operating result of the Orlen Group for the period of 12 and 3 months ended December 31, 2023, it will increase by approximately PLN 4.7 billion and PLN 1.6 billion, respectively.
Consolidated net result of the Orlen Group in 2023 will increase by approximately PLN 3.6 billion and PLN 0.8 billion, respectively.
The increase in Orlen’s profits for 2023 is due to, among others, from the recognition, at the moment of merger, of assets and liabilities under futures contracts relating mainly to the purchase and sale of gas, electricity and CO2 emission allowances former PGNiG group, in their fair values measured at the moment of merger of the entities and their settlement in the profit and loss account at the moment of actual execution of a given futures contract in 2023, in the values of PLN 8.3 billion and PLN 2.5 billion, respectively.
Inventories and write-offs
It also influences the result inventory revaluation at the moment of merger, mainly relating to gas inventories, which had an impact on the cost of sales recognized in subsequent periods, including the reversal of the effects of establishing and reversing write-offs revaluating gas inventories to their realizable values, previously recognized by the group, in the values of 1 PLN .6 billion and PLN (0.1) billion.
Orlen also recognized additional write-offs as a result of the group’s comparison of the changed book values of non-financial fixed assets with the determined recoverable value as part of the impairment tests carried out at the end of the first quarter of 2023, in particular in the mining segment, which will have a negative impact on the result presented for the period of 12 months of 2023 in the amount of ( PLN 1.8 billion.
Capturing change depreciation as a result of determining the final fair values of property, plant and equipment, intangible assets and rights-of-use assets for the period of 12 and 3 months ended December 31, 2023, their values will amount to PLN (2.9) billion and PLN (0.6) billion, respectively.
The impact of changes related to the fair value measurement of assets and liabilities on the value of deferred tax assets and deferred tax liabilities, which translated into the value of recognizing deferred tax in the income statement in the period of 12 and 3 months ended December 31, 2023 in values respectively (PLN 1.2) billion and PLN (0.8) billion.
Orlen will publish consolidated quarterly report for 4 quarters of 2023 on February 22, 2024.
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