In Q3 2024, ORLEN Group's net profit amounted to PLN 188 million, a decrease of PLN 4.4 billion compared to the same period last year. The group’s profit for the first nine months of this year totalled more than PLN 3.01 billion, down by PLN 17.03 billion compared to the corresponding period of the previous year.
The company’s consolidated net profit in Q3 2024 stood at PLN 222 million, compared to PLN 4.6 billion in the same period last year, as reported by the company. Operating profit reached PLN 1.6 billion, down from PLN 7.1 billion a year earlier. EBITDA amounted to PLN 5 billion, compared to PLN 10.519 billion last year. The EBITDA LIFO (Last In, First Out) indicator, which includes the reported EBITDA plus the valuation of inventory using the ‘last in, first out’ method, amounted to PLN 5.3 billion, compared to PLN 9.2 billion last year. The EBITDA LIFO figure, excluding impairment costs, was PLN 8.8 billion, down from PLN 10.3 billion a year earlier.
‘In the past quarter, we launched the largest investment programme in the history of the modernisation of the energy system in northern Poland. We also completed a significant portion of the work related to connecting the Baltic Power power station to the mainland. Despite this, we continued the process of conducting impairment tests to ensure the reliability of ORLEN Group's value. These tests revealed multibillion-dollar losses due to poor management in previous years. Despite the adverse macroeconomic conditions, we achieved financial results comparable to last year,’ the company’s CEO Ireneusz Fafara has explained in the press release.
Consolidated sales revenue in Q3 2024 amounted to PLN 67.9 billion, compared to PLN 79.5 billion last year.
The EBITDA LIFO for the refining segment in Q3 was PLN 520 million, primarily affected by the adverse macroeconomic situation, including a 65% decrease in refining margins year-on-year and the strengthening of the zloty against the dollar. The company maintained a high level of utilisation of refining capacity, reaching 94%. ORLEN Group's plants in Poland, the Czech Republic, and Lithuania refined 10.1 million t of crude oil during this period. Fuel output in Poland increased by 6% compared to the previous year due to the reduction in the share of high-sulphur crude oil in the refining mix.
The EBITDA LIFO for the petrochemical segment was a loss of PLN 118 million. Despite a slight 3% increase in sales, the segment’s results remained under pressure from adverse market and macroeconomic factors.
The energy segment recorded an EBITDA LIFO of PLN 949 million, driven by an increase in margins for energy distribution and sales, as well as a reduction in CO2 emission costs. Currently, 77% of ORLEN Group's electricity is generated from renewable sources and gas installations.
The EBITDA LIFO for the retail segment was PLN 1.1 billion. This result was achieved, in part, due to an 8% increase in sales driven by the expansion of the number of filling stations and the normalisation of fuel margins compared to last year.
The absence of impairment of funds from the price differential payment fund, along with the expansion of operations in Norway, led to a result of PLN 3.3 billion in the exploration and production segment. By consolidating assets of the acquired KUFPEC company in Norway, ORLEN Group increased hydrocarbon production by 22% year-on-year to approximately 190,000 bpd.
In Q3 of this year, the gas segment recorded an EBITDA profit of PLN 3.4 billion. This result was achieved despite a decline in trading margins year-on-year and negative macroeconomic effects. Simultaneously, the segment’s performance was boosted by increased gas sales and the absence of impairment in the Price Differential Payment Fund. Gas imports during this period decreased by 11% compared to the previous year.
Before announcing the update to its strategy, the company’s management wants to make a decision on the flagship investment, the Olefins III project. It is already clear that the project will be implemented differently from the original plan, as its cost is expected to increase from the previously stated PLN 25 billion to PLN 45—51 billion. More importantly, the project is currently unprofitable. As a result, it must either be optimised or terminated.
As the company reported at the beginning of November, two scenarios for the Olefins III project were analysed. One of them involved a complete or partial shutdown of the project, while the other was based on an optimisation scenario in terms of production capacity and the use of existing installations. The previous management is expected to make a decision on the future of the Olefins III investment by December at the latest.
This year, ORLEN Group plans to spend a total of approximately PLN 33 billion on investments, compared to PLN 32.4 billion in 2023. After three quarters, this figure amounted to PLN 20.8 billion. The majority of these funds have been allocated to the mining, refining, energy, and petrochemical sectors.