Orlen's net profit
After taking into account income tax in the amount of PLN 1 billion, 690 million, the net profit of the Orlen Group for the three months of 2024 reached the value of PLN 2 billion, 785 million and was lower by PLN 6 billion, 686 million year on year, Orlen reported.
The company reported that the sales revenues of the Orlen Group for the three months of this year amounted to PLN 82 billion 332 million and were lower by PLN 33 billion 496 million year-on-year. As explained in the announcement, the decline in sales revenues concerned mainly the gas, refinery, energy and mining segments.
According to the report, the total assets of the Orlen Group at the end of March this year amounted to PLN 262 billion 997 million and were lower by PLN 1 billion 181 million compared to the end of December 2023.
In a press release, the company emphasized that the Orlen Group ended the first three months of this year with an EBITDA LIFO operating profit of PLN 8.4 billion. As noted, stable financial results were achieved with a simultaneous decrease in net debt by PLN 1 billion quarter to quarter.
Investments
Orlen reported that during this time the company allocated nearly PLN 6.4 billion for investments in all areas of its operations.
“We are accelerating. The energy transformation is one of the greatest business opportunities in history. Orlen must take advantage of it. That is why we focus on the most promising projects and technologies. We place greater emphasis on efficiency,” said Orlen's president, Ireneusz Fąfara, quoted in the company's press release.
Strategic objectives
As he emphasized, the goals declared in the Orlen Group's strategy until 2030 are consistent with the directions of market development, but their implementation is significantly delayed. “We need to catch up, and where this is not possible or business-wise, verify previous assumptions,” he noted.
Orlen's president added that in order to achieve strategic goals, some investment projects require “significant acceleration.” “We know how to do it. We will present the detailed direction of the verified actions in the strategy update, which we will publish by the end of this year,” Fąfara announced.
According to the company, in the first quarter of this year the refining segment generated LIFO EBITDA of nearly PLN 2.3 billion, and this result was achieved in the environment of normalizing refining margins, maintaining a high level of refining capacity utilization, reaching 90%. – Orlen Group refineries in Poland, the Czech Republic and Lithuania processed 9.5 million tons of oil during this time, with higher fuel yields achieved year-on-year in Poland and the Czech Republic, with a comparable level in Lithuania.
In the first three months of this year, the energy segment of the Orlen Group recorded EBITDA of PLN 2.4 billion. According to the company, the total installed capacity amounted to 5.6 GWe, thanks to which 5.5 TWh of electricity was produced at that time, 12 percent. more year to year. The increase in production was possible, among others, thanks to the acquisition of new wind farms. Orlen emphasized that currently almost 70 percent electricity is generated in the company from renewable sources and in gas-powered units.
The EBITDA result of the Orlen Group's retail segment in the first quarter of this year was PLN 511 million. The company assessed that this is the result of, among others, higher by 20 percent sales, which increased by 13% in Poland and 21% in the Czech Republic. As noted, for the first time the results of the gas station network in Austria taken over in January were also reported, which constitute 8 percent. total sales.
Orlen pointed out that thanks to, among others, Due to this transaction, its network has been expanded by 361 modern gas stations, of which the company now has 3,483 in total in seven European countries. At the same time – as it was emphasized – investments in alternative refueling stations are being consistently carried out, the number of which increased by 137 year-on-year – to 787, mainly in Poland – 541 and the Czech Republic – 142. The company pointed out that at the same time the number of non-fuel sales points is also growing and currently there are already 2,666 of them, of which over 70 percent in Poland.
“Orlen, while developing all areas of its operations, maintains a good, stable financial situation. We have strong foundations that allowed the management board, in accordance with the applicable dividend policy, to recommend the payment of dividend for 2023 at the level of PLN 4.15 per share,” said Magdalena Bartoś, vice-president financial concern.
She added: “We are returning to the values that should guide a listed company. We intend to restore corporate governance standards and standardize reporting methods throughout the company.”
Ratings
At the end of the first quarter of this year, thanks to the generation of PLN 11.7 billion of cash flows from operating activities, the company's net debt level – as stated in Orlen's announcement – “remained at a safe level of PLN 0.8 billion.” The company maintained its highest ratings in history – A3 by Moody's Investors Service and “BBB+” by Fitch Ratings.
According to Orlen, the result of the company's mining segment of minus PLN 4.1 billion was mainly due to the adopted regulatory solutions supporting consumers, as well as a drop in gas prices by approximately 48%. In the first quarter, the company increased its sales by almost 14%. year-to-year production, which amounted to approx. 215 thousand boe/d (barrels of equivalent per day – PAP). This was mainly due to the consolidation of the assets of the acquired KUFPEC company in Norway, as stated in the announcement.
In turn, EBITDA of PLN 7.9 billion was recorded in the first quarter by the gas segment of the Orlen Group. This result was achieved with lower year-on-year commercial margins and a negative macro impact. Gas supplies to Poland at that time amounted to 28.1 TWh, of which 46 percent was LNG. Gas storage stocks in Poland and abroad at the end of the quarter amounted to 8.6 TWh.
As the company emphasized, as a result of lower margins on all petrochemical products and the strengthening of the Polish zloty against the euro, the petrochemical segment achieved a LIFO EBITDA result of PLN 4 million. At the same time, by 9 percent sales volumes increased year on year.
Orlen Group
The Orlen Group is a multi-energy concern that owns, among others: refineries in Poland, the Czech Republic and Lithuania, as well as a network of gas stations, including in Germany, Slovakia, Hungary and Austria. It is developing the hydrocarbon, oil and gas, petrochemical and renewable energy segments and plans to develop nuclear energy. By 2030, it intends to launch at least one small SMR nuclear reactor.
When the Orlen Group's strategy until 2030 was updated in 2023, taking into account its priority goals after the previous merger with the Energa Group, Lotos Group and PGNiG, it was stated, among other things, that the company plans to invest over PLN 320 billion by the end of the decade. (PAP)
Author: Michał Budkiewicz
