The ORLEN Group ended the fourth quarter of 2023 with an operating profit EBITDA LIFO* of PLN 11.2 billion ($2.9 billion) and a net profit of PLN 7.3 billion ($1.9 billion). The total EBITDA LIFO* for the whole of 2023 stood at PLN 44.8 billion ($11.6 billion), while the net profit reached PLN 27.6 billion ($7.1 billion). In the fourth quarter, the group’s performance was positively influenced by the gas segment, which achieved an operating EBITDA profit of PLN 11 billion ($2.8 billion) due to, among other things, lower gas acquisition costs and higher sales. ORLEN also increased its sales volumes in the retail sector by over 20% (year-on-year), thanks in part to the acquisition of stations in Hungary and Slovakia.
“The results that ORLEN achieved last year are directionally consistent with the group’s strategic plans. However, it is crucial for ORLEN to fully exploit its potential created after the mergers. Particularly important is the implementation of projects supporting the future of the ORLEN Group and its transformation. We currently have OZE (Renewable Energy Sources) capacities at nearly 1 GW, which will continue to increase through investments and new acquisition processes. We are also investing in hydrocarbon extraction and the refinery-petrochemical sector. The group’s planned investment outlays for this year amount to over PLN 38 billion ($9.8 billion), of which nearly PLN 28 billion ($7.2 billion) is allocated to development investments. We must implement these plans in the most effective way, hence the choice of projects generating the highest returns and with the best perspectives for our shareholders will be very important,” says Witold Literacki, acting CEO of ORLEN.
In the fourth quarter of 2023, the ORLEN Group achieved revenues of PLN 98.3 billion ($25.4 billion), EBITDA LIFO of PLN 11.2 billion ($2.9 billion), and a net profit of PLN 7.3 billion ($1.8 billion).
For the year 2023 as a whole, the ORLEN Group achieved revenues of PLN 373 billion ($96.5 billion), EBITDA LIFO of PLN 44.8 billion ($11.6 billion), and a net profit of PLN 27.6 billion ($7.1 billion).
*Operating result before depreciation
In the fourth quarter of 2023, the group’s extraction segment generated an EBITDA LIFO result of PLN 578 million ($150 million). The result was also significantly impacted by falling hydrocarbon prices, including a decrease of about 60% (year-on-year) for gas and 6% (year-on-year) for oil. The average production of oil and gas in the fourth quarter, mainly in Poland and Norway, was approximately 185,000 boe/day and was nearly 20% higher (quarter-on-quarter).
In the field of extraction, a strategic transaction was concluded in November – PGNiG Upstream Norway from the ORLEN Group took control over the entire operations of the extraction company KUFPEC Norway. As a result of the transaction, the ORLEN Group’s natural gas extraction in Norway will increase by one-third and will exceed 4 billion cubic meters per year, while daily hydrocarbon production will exceed 100,000 barrels of oil equivalent in 2024.
Thanks to the merger of ORLEN with the PGNiG Group, the gas segment recorded an EBITDA result of PLN 11 billion ($2.8 billion) in the fourth quarter. The result was influenced by, among other things, higher wholesale sales and lower gas acquisition costs.
The refinery segment generated an EBITDA LIFO profit of PLN 594 million ($154 million) in the fourth quarter of 2023. The result achieved by this sector was affected by an unfavorable macroeconomic environment, including a change in the structure of processed oils, a departure from Russian raw materials, and a strengthening of the zloty against the dollar.
The energy segment recorded an EBITDA result of PLN -799 million ($-207 million) in the fourth quarter.
The retail segment achieved an EBITDA result of PLN 633 million ($164 million) in the last quarter of the previous year. The increase in sales during this period by 21%, including gasoline sales by 14%, diesel oil by 26%, and LPG by 3%.
The Group’s retail network increased by 73 stations (year-on-year) to 3170, mainly in Germany as a result of the acquisition of self-service gas stations from OMV and in Hungary and Slovakia as a result of the acquisition of gas stations from MOL.
ORLEN, spending billions of zlotys on investments, maintained a good and stable financial situation last year. At the end of 2023, the net debt level remained at a safe level of PLN 1.8 billion ($467 million). The net debt to EBITDA operating result ratio was -0.02x.
In 2023, ORLEN allocated a record PLN 32.4 billion ($8.4 billion) to the implementation of strategic investment projects. This level of expenditure demonstrates the potential of the merged ORLEN, LOTOS, and PGNiG groups.
In 2024, in line with strategic assumptions, ORLEN will implement the most important investment tasks, supporting the development of individual areas of activity.
