Orlen's Q2 profits jump as upstream gains and write-downs offset each other

Orlen, a Polish energy company, reported on Thursday a nearly 74% increase in its second quarter profit. A strong performance upstream helped to offset the effects of lower refining and asset writedowns.

EBITDA LIFO (core profit adjusted for changes to the value of oil inventories) reached $7.72 billion ($2.12 billion), and this was achieved despite 1.49 billion in writedowns mainly in upstream and downstream.

Oil refiners' upstream business has reversed a massive year-ago loss, thanks to a windfall tax imposed by the government in order to fund energy prices freezes.

Orlen’s energy business saw a 368 million zloty increase in its core profit year-on-year. The company attributed this to an increased distribution of gas and electricity.

The division of consumers and products reported an increase in sales of 363 million zlotys, mainly due to higher gas and electric sales.

The macro-environment was less favorable, which led to a 561-million-zloty drop in profits for its downstream business. The second quarter's refining margin for the group fell by around 10% to $11.3 per barrel.

A 217 million zloty reserve that the company had booked for an arbitration also affected results.

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In a presentation, the company stated that it expects its EBITDA based on LIFO to be higher than 2024 in 2025. ($1 = 3,6483 zlotys). (Reporting and editing by Rafal Andak, Marek Strzelecki)

(source: Reuters)