Lithuanian Prime Minister Algirdas Butkevičius met with the ORLEN Lietuva Management Board at the Mazeikiai refinery to discuss the company’s deteriorating financial performance. During the meeting, Ireneusz Fąfara, CEO of ORLEN Lietuva, presented to Lithuanian Prime Minister concrete solutions which, if urgently implemented, could help improve the financial condition of the Mazeikiai refinery. Special attention was paid to actions which, in the opinion of the ORLEN Lietuva Board, should be immediately undertaken by the Lithuanian authorities to ensure stability of the refinery’s operations in the near future, particularly, the problem of logistics costs.
In recent years, ORLEN Lietuva has taken a number of optimisation measures, including measures designed to improve the efficiency of production and sales, and to optimise costs and employment, all with a view to improving the Company’s financial performance.
However, the potential of internal optimisation measures is already running out. Therefore, from PKN ORLEN’s perspective, there is an urgent need for certain decisions to be made by both the Lithuanian authorities and other state entities cooperating with ORLEN Lietuva that will allow the Mazeikiai refinery to continue as a viable business. Last year, ORLEN Lietuva reported a net loss of USD 94.3 million. Recently, in the face of the deteriorating macroeconomic environment, the refinery’s throughput has been limited to a necessary minimum, that is to 60 per cent of its nameplate capacity. At the moment, various further options are being reviewed, including a number of more far-reaching scenarios.
Since 2006, PKN ORLEN has spent nearly USD 4 billion on the acquisition of and further investments in the Mazeikiai refinery. PKN ORLEN has never distributed any of ORLEN Lietuva’s profit as dividend, and has reinvested all financial resources available at the company in its development.