PKN ORLEN Group Strategy 2009-2013
No. 104/ 2008  | 25-11-2008

Polski Koncern Naftowy ORLEN Spolka Akcyjna (“PKN ORLEN”) hereby announces that on 25 November 2008 the Supervisory Board of PKN ORLEN approved the document “PKN ORLEN Group Strategy 2009-2013” (“Strategy”).

The main assumption of the Strategy is the creation of value for PKN ORLEN through focus on activities that strengthen efficiency and the development and lengthen of PKN ORLEN’s value chain in the core segments: refining, retail and petrochemicals and through developing upstream segment and building of energy segment. The Strategy also includes disposals in PKN ORLEN’s non-core businesses, i.e. telecommunication and chemicals.

The Strategy assumes achieving the following financial targets for the PKN ORLEN Group in 2013 1:
EBITDA acc. with LIFO 2: PLN 7.8 bln 5
ROACE 3: 11%
Capex 4: PLN 2.5 bln annual average; PLN 12.6 bln in total

EBITDA target for 2013 – breakdown by operating segments of the PKN ORLEN Group:
Exploration and production of crude oil: PLN 0.2 bln
Refining and marketing: PLN 4.5 bln
Retail: PLN 1.2 bln
Petrochemicals: PLN 2.7 bln

ROACE target for 2013 – breakdown by operating segments of the PKN ORLEN Group:
Exploration and production of crude oil: 23%
Refining and marketing: 11%
Retail: 18%
Petrochemicals: 14%

Annual average capex target for PKN ORLEN Group for the years 2009-2013 – breakdown by operating segments of the PKN ORLEN Group:
Exploration and production of crude oil: PLN 0.14 bln
Refining and marketing: PLN 1.0 bln
Retail: PLN 0.3 bln
Petrochemicals: PLN 1.0 bln
Supporting functions: PLN 0.07 bln

1 Targets are presented with the assumption of the following macroeconomic factors in 2013:
PKN ORLEN model refining margin: 3.6 USD/bbl,
Brent crude price: 88 USD/bbl,
PKN ORLEN model petrochemical margin on olefins: 491 EUR/t,
PKN ORLEN model petrochemical margin on polyolefins: 267 EUR/t,
PKN ORLEN model chemical margin: 597 EUR/t,
Brent/Ural differential: 2.9 USD/bbl,
PLN/EUR exchange rate: 3.20
PLN/USD exchange rate: 2.37.

PKN ORLEN (Group) model refining margin = revenues from products sales (88% Products = 22% Gasoline + 11% Naphtha + 38% Diesel + 3% LHO + 4% JET + 10% HHO) minus costs (100% input = 88% Brent Crude + 12% internal consumption); products’ prices according to quotations.
Model petrochemical margin on olefins = revenues (100% Products = 50% Ethylene, 30% Propylene, 15% Benzene, 5% Toluene) minus costs (100% input = 70% Naphtha + 30% LS VGO); products’ prices according to quotations.
Model petrochemical margin on polyolefins = revenues (100% Products = 50% HDPE + 50% Polypropylene) minus costs (100% input = 50% Ethylene + 50% propylene); products’ prices according to quotations.
PKN ORLEN model chemical margin = revenues from PVC sales (100%) minus costs (47% Ethylene); products’ prices according to quotations.

2 EBITDA = operating profit with depreciation; concerning PKN ORLEN Group, provisions valuation method in acc. with LIFO.

3 ROACE = operating profit after taxes / average capital engaged in period (book value + net debt)

4 cumulative value in the years 2009-2013 on the level of all PKN ORLEN Group.

5 Including supporting function impact PLN (-) 0.8 bln

Details of the Strategy will be presented to capital markets representatives at the press conference and teleconference, which are planned for 26 November 2008.


Go back to previous page.

OUR BRANDS