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ORLEN Group Reports Strong Financial Results for Q1 2024: EBITDA LIFO at PLN 8.4 Billion and Net Profit of PLN 2.8 Billion

COMPANIESORLEN Group Reports Strong Financial Results for Q1 2024: EBITDA LIFO at PLN 8.4 Billion and Net Profit of PLN 2.8 Billion

ORLEN Group concluded the first quarter of 2024 with an operating profit (EBITDA LIFO*) of PLN 8.4 billion and a net profit of PLN 2.8 billion. These stable financial results were achieved alongside a reduction in net debt by PLN 1 billion (quarter-on-quarter). During this period, the company allocated nearly PLN 6.4 billion to investments across all areas of its operations. As a result of increased demand in Poland, entry into a new market, and the acquisition of over 260 fuel stations in Austria, the retail segment recorded a 20% increase in sales (year-on-year). The energy segment also delivered stable results, increasing its production of renewable and low-emission electricity to nearly 70%.

“We are accelerating. The energy transition represents one of the greatest business opportunities in history, and ORLEN must seize it. That’s why we are focusing on the most promising projects and technologies. We are placing greater emphasis on efficiency. The goals outlined in ORLEN Group’s strategy up to 2030 align with market development directions, but their implementation is significantly delayed. We need to catch up, and where it is not feasible or justified, we must reassess previous assumptions. To achieve our strategic goals, some investment projects require significant acceleration. We know how to do it. We will present a detailed direction of revised actions in the strategy update, which we will publish by the end of this year,” said Ireneusz Fąfara, President of the Management Board of ORLEN.

In the first quarter of 2024, ORLEN Group achieved:

– Revenue: PLN 82.3 billion
– EBITDA LIFO: PLN 8.4 billion*
– Net profit: PLN 2.8 billion

*Operating profit before write-downs of fixed assets of (-) PLN 0.7 billion

In the first quarter of 2024, the refinery segment achieved an EBITDA LIFO profit of nearly PLN 2.3 billion. This result was achieved in an environment of normalizing refinery margins while maintaining a high utilization rate of refinery capacities, reaching 90%. ORLEN Group’s refineries in Poland, the Czech Republic, and Lithuania processed 9.5 mt of crude oil during this period. Higher fuel yields were achieved in Poland and the Czech Republic, with comparable levels in Lithuania.

The extraction segment recorded a loss of (-) PLN 4.1 billion, mainly due to regulatory measures supporting consumers and a decrease in gas prices by approximately 48%. However, the company increased production by nearly 14% (year-on-year), reaching approximately 215 thousand boe/d, primarily due to the consolidation of assets from the acquired KUFPEC company in Norway.

The gas segment recorded an EBITDA of PLN 7.9 billion in the first quarter, achieved despite lower (year-on-year) trading margins and a negative macroeconomic impact. Positive contributions to this result included the lower (year-on-year) cost of extracting raw materials from storage and reduced import costs. Gas deliveries to Poland totaled 28.1 TWh, with LNG accounting for 46% of this amount. Gas storage reserves in Poland and abroad amounted to 8.6 TWh at the end of the quarter.

The petrochemical segment achieved an EBITDA LIFO of PLN 4 million, impacted by lower margins on all petrochemical products and the strengthening of the Polish złoty against the euro. Nevertheless, sales volumes increased by 9% (year-on-year), including a 9% rise in olefin sales, a 40% increase in fertilizer sales, and a 37% rise in PTA sales. Sales in Poland grew by 13%.

The energy segment recorded an EBITDA of PLN 2.4 billion in the first quarter. ORLEN Group’s total installed capacity reached 5.6 GWe, producing 5.5 TWh of electricity, a 12% increase (year-on-year). This growth was driven in part by the acquisition of new wind farms. Currently, nearly 70% of the electricity is generated from renewable sources and gas-powered units.

The retail segment reported an EBITDA of PLN 511 million in the first quarter, attributed to a 20% increase in sales, with sales rising by 13% in Poland and 21% in the Czech Republic. For the first time, results from the fuel station network acquired in Austria in January were reported, contributing 8% of total sales. This acquisition expanded ORLEN’s network by 361 modern fuel stations, bringing the total to 3,483 stations in seven European countries. Additionally, ORLEN is consistently investing in alternative fueling stations, increasing their number by 137 (year-on-year) to 787, primarily in Poland (541) and the Czech Republic (142). The number of non-fuel sales points also grew to 2,666, with over 70% located in Poland.

“ORLEN is maintaining a good, stable financial situation while developing all areas of its operations. We have strong foundations, enabling the management board to recommend a dividend payment of PLN 4.15 per share for 2023, in line with our dividend policy. We are returning to the values that should guide a publicly listed company. We intend to restore corporate governance standards and standardize reporting methods across the entire corporation,” said Magdalena Bartoś, Vice President of the Management Board for Finance at ORLEN.

At the end of the first quarter, ORLEN’s net debt level remained safe at PLN 0.8 billion, thanks to generating PLN 11.7 billion in cash flow from operating activities. The net debt to EBITDA ratio was (-) 0.01x. This strong financial position was recognized by the financial market, with ORLEN maintaining its highest-ever credit ratings of A3 from Moody’s Investors Service and “BBB+” from Fitch Ratings.

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