Polish refiner Orlen suffers a loss in Q2 due to tax payments and lower gas prices

Orlen, a state-owned oil refiner in Poland, reported a loss of 10 million zlotys (40 million dollars) for the second quarter of 2009 compared to its net profit of 6 billion zlotys the year before. This was due to the tax paid on windfall profits as well as lower gas prices.

Orlen's second-quarter earnings, before depreciation, amortisation and the impact of crude prices on the value inventories, known as EBITDA LIFO, and excluding writedowns and regulatory payment, increased 8% over the previous year, to 11.31 billion Zlotys. This confirms an earlier estimate.

The company spent 7.7 billion Zlotys in the second quarter to stabilize gas prices for consumers who were vulnerable. This is more than twice the 3.7 billion Zlotys it spent a year earlier.

The company reported that margins were still under pressure in the petrochemicals division, which had an operating loss amounting to 842 million Zlotys.

The second-quarter operating profits for the refining sector rose by 25%, to 2.2 billion Zlotys. Higher volumes and an insurance compensation offset lower margins.

Due to the windfall taxes and the drop in gas prices that also affected the operating profit of the gas segment, the upstream segment suffered a quarterly loss of more than 5.3 billion zlotys. This fell by 51% on an annual basis to 3.6 billion Zlotys.

The company reported that capex had reached 14.0 billion Zlotys during the first half of this year. It also said it reduced the full-year budget by 3.3 billion Zlotys, to 35.3 billion Zlotys.

The company said that it expects margins in the petrochemical industry to increase as well.

(source: Reuters)