GDANSK (Reuters) -Polish energy group Orlen on Thursday reported a near 74% rise in its second-quarter profit, with a strong upstream performance helping to offset the impact of lower refining margins and asset write-downs. The company’s core profit adjusted for changes in value of its oil inventories, or EBITDA LIFO, reached 7.72 billion zlotys ($2.12 billion), a result achieved despite booking 1.49 billion zlotys in write-downs, mainly in the upstream and downstream segments.
The oil refiner’s upstream business reversed a massive loss from the previous year, as its results were no longer weighed down by a one-off 7.7 billion zloty write-down following a government windfall tax levied to fund energy price freezes.
Orlen’s energy business saw its core profit rise by 368 million zlotys year-on-year, which the company attributed to increased gas and electricity distribution.
Its consumers & products division reported a 363 million zloty year-on-year increase, driven by higher sales of gas and electricity.
However, profits at its downstream business fell by 561 million zlotys year-on-year, hit by a less favourable macro environment. The group’s second quarter refining margin declined around 10% from the year before to $11.3 per barrel.
The results were also impacted by a 217 million zloty provision the company booked in relation to an arbitration ruling that allows Russia’s Gazprom to retroactively raise gas prices.
The company said in a presentation it expected its full-year LIFO-based EBITDA to be higher in 2025 than in 2024.
($1 = 3.6483 zlotys)
(Reporting by Rafal Nowak and Marek Strzelecki;Editing by Christian Schmollinger)
