On Wednesday, Orlen announced that due to the loss of PLN 1.6 billion by OTS prepayments for undelivered oil and low probability recover the money will make the appropriate decision write-off in the financial results for 2023.
Loss of the subsidiary
“Referring to the published current report No. 23/2024 of April 10, 2024, ORLEN SA informs that in connection with the information received about the correction of the financial result in the subsidiary ORLEN Trading Switzerland GmbH with its registered office in Baar, Switzerland, “Subsidiary”, resulting from the write-off of assets due to advance payments for deliveries in the amount of PLN 1.6 billion, the Issuer analyzed the impact of the above-mentioned event on its separate financial result. The analysis concerned in particular the components assets of the Subsidiaryincluding the value of the investment in the Subsidiary and the financial assets due from the Subsidiary under the cash pool recognized as at the reporting date, in terms of their impairment as at the balance sheet date,” Orlen said in a press release.
As he added, due to the “low probability” recovery of funds by OTSwhich it paid as prepayments for the purchase of crude oil and petroleum products, Orlen assessed that its cash pool receivables from the Subsidiary (OTS) in the amount of PLN 1.3 billion “were impaired at the end of the reporting period due to on credit risk. Therefore, ORLEN SA recognized an impairment loss of financial assets in the amount of PLN 1.3 billion in its separate financial result.
OTS assets
Orlen explained that the difference in the amount of PLN 0.3 billion between the write-off recognized in the consolidated statements of the Orlen Group in the amount of PLN 1.6 billion and the write-off recognized in the separate statements of Orlen in the amount of PLN 1.3 billion results from the fact that OTS has net current assets “including cash, inventories and current receivables from which the Subsidiary Company (OTS) is able to cover the remaining cash pool liabilities towards ORLEN SA”.
“The inclusion of the above adjustment will not affect the standalone operating result increased by EBITDA amortization ORLEN for 2023, however, will affect ORLEN's net result for 2023 by reducing it in total by PLN 1.3 billion,” Orlen said, noting that “the event is currently under audit by a certified auditor and may change.”
The company announced that they are ongoing analysis of the value of other assets. “If impairment losses or reversals of impairment losses are probable, having a significant impact on the financial data for 2023, the Company will provide such information in a current report,” the statement said.
drag/mhr/
