PKN ORLEN's performance in 3Q 2004
PKN ORLEN has achieved another record quarter, with net profit of PLN 837m in the 3Q 2004, calculated according to IFRS. After 9 months of the year, PKN ORLEN’s cost cutting programme has generated savings of PLN 488m.
The key factor behind the favourable market conditions was the 46 per cent increase in crude oil prices. The Ural / Brent differential (y-on-y) reached USD 4.30 per barrel.
Market background
Industrial production throughout 9 months of the year rose by 9.3 per cent compared to the same period of the previous year. From a sector perspective, it is important to note that sales of new cars in Poland in 3Q 2004 increased by only 0.5 per cent (compared with 3Q 2003), whereas imports of the second-hand cars rushed significantly. Domestic fuel consumption (petrol, diesel, heating oil) is estimated to have risen by approximately 3.3 per cent. PKN ORLEN’s market share of Polish liquid fuel consumption in the first 9 months of the year, has been estimated at 62.9 per cent for petrol, 49.9 per cent for diesel and 59.1 per cent for heating oil.
PKN ORLEN’s revenues after 9 months of the year increased by 28 per cent compared with the same period of the last year.
Cost cutting programme
The cost cutting programme in 3Q 2004 generated savings of PLN 182m and after three quarters the savings total PLN 488m against PLN 450 – 500m planned for the whole of 2004.
Refining and wholesale
Thanks to the favourable market environment, increased efficiencies and bigger sales volumes, refinery and wholesale operations recorded an operating profit of PLN 770m in 3Q 2004, which is by PLN 457m more compared to 3Q 2003. The cost cutting initiatives in this segment delivered over PLN 68m of savings. External sales of diesel, petrol and heating oil in 3Q 2004 rose by 24.3 per cent, 12 per cent and almost 35 per cent, respectively (compared with 3Q 2003).
Retail
Profit from retail operations in 3Q 2004 totaled PLN 81m and rose by PLN 19m (30.6 per cent) compared to the same period of the previous year.
Petrochemicals
Throughout 3 quarters of this year petrochemical segment witnessed a 300 per cent increase in profits (compared to the same period of the previous year) due to a peak in international market demand for the petrochemicals and fertilizers produced by PKN ORLEN and Anwil. This segment benefited from increased volumes and values of the offered products. PKN ORLEN and Anwil generated operating profit of PLN 182m and PLN 64m, respectively in this segment. The figure generated in this segment in 3Q 2004 is by 85 per cent higher than in the corresponding period of the previous year.
Comment
Pawel Szymanski, President and CFO, said:
“ORLEN’s record results clearly reflect our improved corporate efficiency, including the cost cutting programme, as well as favourable micro and macro market conditions. All these factors have allowed us to send another good message to our shareholders.”
Press Office
PKN ORLEN
