ORLEN Group
consolidated financial results
3Q23
31 October 2023
#ORLEN3Q23@GrupaORLEN
01
KEY FACTS
02
MARKET
ENVIRONMENT
03
FINANCIAL AND OPERATING RESULTS
04
FINANCIAL
SITUATION
05
OUTLOOK
01
Key facts
2
Key facts 3Q23
Revenues
75,4 PLN bn
EBITDA LIFO
8,2 PLN bn
Cash flows from operations
7,2 PLN bn
CAPEX - cumulative for 9 months 2023
20,4 PLN bn
3
TRANSFORMATION PROJECTS
- OFFSHORE: final investment decision for Baltic Power, construction of the installation terminal.
- Conditional agreement for purchase of wind farms in Poland with capacity of ca. 60 MW.
- CCS: partnership with Horisont Energi to explore potential collaboration on one of the most advanced CCS initiatives on the Norwegian Continental Shelf.
- Synthetic fuels: cooperation agreement with Yokogawa to develop cutting-edge integrated production system.
- Biofuels: UCO FAME installation launching to produce II generation biocomponents from cooking oils.
- H2: tests of the company's first publicly available hydrogen station in Poland.
RETAIL
- Entering the Austrian market: EC consent to purchase 266 fuel stations.
- Finalisation of rebranding of 90 fuel stations in Slovakia.
- The next stage of rebranding in Germany: 100 ORLEN stations till the beginning of 2024.
CRUDE THROUGHPUT AND UPSTREAM
- Finalisation of the third nitrogen fertilizer production line.
- Start of production from the Tommeliten Alpha by PGNiG Upstream Norway.
ORGANISATION
- Starting the process of taking control of the Transit Gas Pipeline System.
- Agreement for the construction of a modern oil pressing plant in Kętrzyn.
- The first hydrogen locomotive in ORLEN's fleet.
- Conditional share purchase agreement in ENERGOP, pipelines producer, e.g. for refining and petchem sectors.
DIVERSIFICATION OF DELIVERIES
- Expansion of Underground Gas Storage in Wierzchowice, the biggest investment in domestic gas storage facilities started.
- Reservation of regasification capacity at Floating Storage Regasification Unit (FSRU) to be built in the Gulf of Gdansk in 2028.
- Two LNG carriers Święta Barbara and Ignacy Łukasiewicz in ORLEN fleet.
01
KEY FACTS
02
MARKET
ENVIRONMENT
03
FINANCIAL AND OPERATING RESULTS
04
FINANCIAL
SITUATION
05
OUTLOOK
02
Market environment
4
Macroeconomic environment 3Q23
3Q22 | 2Q23 | 3Q23 | ∆ (y/y) | |||
Brent crude oil | USD/bbl | 101 | 78 | 87 | -14% | |
Model refining margin1 | USD/bbl | 13,8 | 21,9 | 34% | ||
16,4 | ||||||
Differential2 | USD/bbl | 7,4 | 1,8 | -1,0 | -114% | |
Natural gas price TTF month-ahead | PLN/MWh | 965 | 158 | 152 | -84% | |
Natural gas price TGEgasDA | PLN/MWh | 954 | 176 | 172 | -82% | |
Electricity price TGeBase | PLN/MWh | 1 067 | 527 | 504 | -53% | |
Refining products4 - crack margins from quotations | ||||||
Diesel | USD/t | 328 | 134 | 243 | -26% | |
Gasoline | USD/t | 287 | 304 | 325 | 13% | |
HSFO | USD/t | -325 | -164 | -138 | 58% | |
Petrochemical products4 - crack margins from quotations | ||||||
Polyethylene5 | EUR/t | 471 | 433 | 353 | -25% | |
Polypropylene5 | EUR/t | 460 | 429 | 345 | -25% | |
Ethylene | EUR/t | 639 | 664 | 547 | -14% | |
Propylene | EUR/t | 598 | 554 | 421 | -30% | |
PX | EUR/t | 586 | 481 | 419 | -28% | |
Average exchange rates6 | ||||||
USD/PLN | USD/PLN | 4,71 | 4,17 | 4,14 | -12% | |
EUR/PLN | EUR/PLN | 4,75 | 4,54 | 4,50 | -5% | |
- Model refining margin = revenues (93,5% Products = 36% Gasoline + 43% Diesel + 14,5% HHO) - costs (100% input: Brent crude oil and other raw materials). Spot quotations. (valid till 31.07.2022) Model refining margin = revenues (93,6% Products = 33% Gasoline + 48% Diesel + 13% HHO) - costs (100% input: 98% Brent crude oil + 2% natural gas). Spot quotations. (valid from 01.08.2022)
- Differential calculated on the real share of processed crude oils. Spot quotations.
5 (4) Margin (crack) for refining and petrochemical products (excluding polymers) calculated as difference between a quotation of given product and a quotation of Brent DTD crude oil.
- Margin (crack) for polymers calculated as difference between quotations of polymers and monomers
- Average exchange rates according to the data of the National Bank of Poland.
Significant increase of fuel consumption in Poland and Czechia (y/y)
GDP1
Change % (y/y)
Poland 4,1
Lithuania
Fuel consumption2
mt
Poland +11%
Lithuania
+2%
-0,6-0,4
3Q22 2Q23 3Q23
Czechia 1,4
-0,1
-1,1
3Q22 2Q23 3Q23
Slovakia 1,5 1,5 1,3
3Q22 2Q23 3Q23
2,2
0,7
0,0
3Q22 2Q23 3Q23
Germany 1,2
-0,6-0,8
3Q22 2Q23 3Q23
Hungary 4,3
-0,9-2,4
3Q22 2Q23 3Q23
6,7
6,1 6,0
3Q22 2Q23 3Q23
Czechia +9%
1,73 1,79 1,89
3Q22 2Q23 3Q23
Slovakia -5%
0,69 0,66 0,65
3Q22 2Q23 3Q23
0,54 0,55 0,55
3Q22 2Q23 3Q23
Germany | ||||||
-2% | ||||||
13,7 | 13,5 | |||||
12,8 | ||||||
3Q22 2Q23 3Q23
Hungary +6%
1,39 1,30 1,48
3Q22 2Q23 3Q23
6 1 3Q23 - own estimates based on bank's projections
2 3Q23 - own estimates based on: Poland (ARE), Lithuania (Statistical Office), Czechia (Statistical Office), Germany (Association of Petroleum Industry), Slovakia and Hungary (Eurostat)
01
KEY FACTS
02
MARKET
ENVIRONMENT
03
FINANCIAL AND OPERATING RESULTS
04
FINANCIAL
SITUATION
05
OUTLOOK
03
Financial and operating results
7
Financial results
PLN ~ 75 bn of revenues
PLN m
3Q22* | 2Q23 | 3Q23 | 9M22* | 9M23 |
+ 2,5 bn | + 84,1 bn | |||
72 915 | 74 621 | 75 424 | 260 315 | |
Revenues | 176 166 | |||
- 2,7 bn | + 12,1 bn | |||
10 939 | 8 703 | 8 220 | 34 076 | |
21 929 | ||||
EBITDA LIFO | ||||
- 0,9 bn | + 8,9 bn | |||
10 386 | 8 319 | 9 503 | 33 804 | |
24 871 | ||||
EBITDA | ||||
- 2,7 bn | + 4,4 bn | |||
6 205 | 4 544 | 17 112 | ||
3 459 | Net result | 12 733 | ||
Revenues: increase by 3% (y/y) due to higher sales volumes and higher quotations of refining products at lower quotations of petchem products and hydrocarbons.
EBITDA LIFO: decrease by PLN (-) 2,7 bn (y/y) due to negative impact of lower volumes effect, lower differential, lower trade margins, lower petchem margins, hedging, strengthening PLN/USD, lower fuel margins in retail, lower margins in upstream as well as higher overheads and labour costs.
Abovementioned effects were limited by positive impact of consolidation of PGNiG Group results, higher refining margins, higher non-fuel margins in retail, lower provisions for CO2 emissions as well as usage of historical inventory layers.
LIFO effect: PLN 1,3 bn impact of changes in crude oil prices on inventory valuation.
Financial result: PLN (-) 0,6 bn as a result of negative impact of net FX differences at positive impact of net interests.
Net result: PLN 3,5 bn of net profit.
8 Operational results before impairment of assets: 3Q22 PLN (-) 53 m / 2Q23 PLN (-) 77 m / 3Q23 PLN (-) 1086 m / 9M22 PLN (-) 2940 m / 9M23 PLN (-) 1692 m
- Operational results for 3Q22 and 9M22 do not include profit on bargain purchase of Lotos Group in the amount of PLN 8546 m recognised in 3Q22
EBITDA LIFO
PLN 4,8 bn of positive impact of consolidation of PGNiG Group results
Segments' results
PLN m
5 200 | 8 220 | |||||||
-431 | -17 | |||||||
1 349 | 601 | |||||||
-212 | ||||||||
1 866 | ||||||||
-136 | ||||||||
Refining | Petchem | Energy | Retail | Upstream | Gas | Corporate | Adjust- | EBITDA |
functions | ments | LIFO | ||||||
3Q23 |
Refining: lower by PLN (-) 5,5 bn (y/y) due to negative macro impact, lower sales volumes, lower result of Lotos Group, lower trade margins as well as higher overheads and labour costs at positive impact of usage of historical inventory layers.
Petchem: lower by PLN (-) 0,8 bn (y/y) due to negative impact of macro, lower sales volumes and lower trade margins.
Energy: lower by PLN (-) 0,3 bn (y/y) as a result of negative impact of macro, negative impact of payments to the Price Difference Payment Fund and provision created in ENERGA Group due to one-off reduction in electricity bills for households at positive impact of consolidation of PGNiG Group results.
Retail: lower by PLN (-) 0,3 bn (y/y) as a result of negative impact of lower fuel margins and higher costs of running fuel stations at positive impact of higher sales volumes and higher non-fuel margins.
Change in segments' results (y/y)
PLN m
-2 719 | |||||||||
10 939 | |||||||||
5 200 | 8 220 | ||||||||
-114 | -12 | ||||||||
-5 453 | -834 | -258 | -255 | ||||||
-993 | |||||||||
EBITDA | Refining | Petchem | Energy | Retail | Upstream | Gas | Corporate | Adjust- | EBITDA |
LIFO | functions | ments | LIFO | ||||||
3Q22* | 3Q23 |
Upstream: lower by PLN (-) 1,0 bn (y/y) due to negative macro impact, lower sales volumes, negative impact of write-off for the Price Difference Payment Fund and higher labour costs at positive impact of consolidation of PGNiG Group results.
Gas: higher by PLN 5,2 bn (y/y) as a result of positive impact of consolidation of PGNiG Group results.
Corporate functions: higher costs by PLN 0,1 bn (y/y) due to increase in the scale of ORLEN Group's operations.
9 Operational results before impairment of assets: 3Q22 PLN (-) 53 m / 2Q23 PLN (-) 77 m / 3Q23 PLN (-) 1086 m / 9M22 PLN (-) 2940 m / 9M23 PLN (-) 1692 m
- Operational results do not include profit on bargain purchase of Lotos Group in the amount of PLN 8546 m recognised in 3Q22
Refining - EBITDA LIFO
Negative impact of macro, lower volumes effect, lower result of Lotos Group and higher costs (y/y)
EBITDA LIFO | Model refining margin and differential | |||||||||||
PLN m | USD/bbl | differential | margin | |||||||||
11 032 | ||||||||||||
-2,9 USD/bbl | ||||||||||||
7 319 | 23,8 | 20,9 | ||||||||||
5 485 | 7,4 | 15,6 | ||||||||||
4 656 | ||||||||||||
1,8 | ||||||||||||
2 112 | 2 536 | 1 866 | 16,4 | 21,9 | ||||||||
13,8 | ||||||||||||
1 198 | 900 | |||||||||||
-1,0 | ||||||||||||
3Q21 | 4Q21 | 1Q22 | 2Q22 | 3Q22 | 4Q22 | 1Q23 | 2Q23 | 3Q23 | 3Q22 | 2Q23 | 3Q23 | |
EBITDA LIFO - impact of factors | ∙ Positive EBITDA LIFO of all refineries in 3Q23. | |||||||||||
PLN m | ||||||||||||
exLotos | ∙ Negative macro impact (y/y) as a result of significantly lower differential by (-) 8,4 USD/bbl | |||||||||||
-5 453 | (y/y) due to changes in the structure of processed crudes, negative impact of hedging and | |||||||||||
7 319 | strengthening of PLN vs USD. The above effects were limited by positive impact of higher | |||||||||||
refining margins, lower costs of CO2 provision and the positive impact of the valuation of | ||||||||||||
CO2 contracts. | ||||||||||||
-1 497 | ∙ Negative volume effect (y/y) due to decrease in sales volumes in Poland by (-) 7%, in the | |||||||||||
Czech Republic by (-) 18% and in Lithuania by (-) 37% as well as changes in the structure | ||||||||||||
of processed crude oils, i.e. limitation of REBCO processing and replacing it with more | ||||||||||||
-2 230 | 1 866 | expensive grades of crude oil. | ||||||||||
In Poland, there is a visible negative impact of maintenance shutdowns (Hydrocracking / | ||||||||||||
-1 726 | ||||||||||||
1 645 | FCC II / H-Oil / Hydrogen Plant) on higher share of heavy fractions in the sales structure. | |||||||||||
221 | ∙ Others include negative impact of lower result of Lotos Group by PLN (-) 0,8 bn (y/y), lower | |||||||||||
EBITDA LIFO | Macro | Volumes | Others | EBITDA LIFO | trade margins and higher overheads and labour costs at positive impact of usage of | |||||||
3Q22 | 3Q23 | historical inventory layers. | ||||||||||
10 | Operational results before impairment of assets: 3Q22 PLN (-) 3 m / 3Q23 PLN 0 m | |||||||||||
Macro: margins PLN 1574 m, differential PLN (-) 1256 m, exchange rate PLN (-) 424 m, hedging PLN (-) 1557 m, valuation of CO2 contracts PLN 97 m, CO2 provision PLN 69 m | 10 | |||||||||||
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Orlen SA published this content on 31 October 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 31 October 2023 06:35:53 UTC.