Bloomberg News

Orlen, Oil Refiner, Reports Third-Quarter Loss on Weak Zloty

November 07, 2011

Nov. 4 (Bloomberg) -- PKN Orlen SA, Poland’s largest oil refiner, reported a net loss in the third quarter, following a net income a year earlier, after the weakening zloty increased the value of its foreign-currency denominated loans.

The loss totaled 258.5 million zloty ($82.3 million), compared with the 1.24 billion-zloty profit a year earlier, the Plock, central Poland-based, company said in a regulatory statement today. That almost matched the 260.6 million-zloty mean estimate of a loss by seven analysts surveyed by Bloomberg.

The state-controlled refiner, which had about 90 percent of its 9.3 billion-zloty debt in foreign currencies, said that a revaluation of the loans and “other positions” because of the zloty, which lost about 10 percent in the quarter against the euro, cut 1.1 billion zloty from its net earnings. Orlen’s nine- month net income fell 4.6 percent to 1.74 billion zloty.

Earnings before interest and taxes, or Ebit, was little changed at 778.3 million zloty as sales, which rose 30 percent to 28.7 billion zloty on rising oil prices and higher volumes, helped Orlen offset narrowing margins.

The company sold 4 percent more tons of products as the combination of refining margin and differential, or the difference between the Urals crude it refines and Brent, which determines product prices, shrank by 15 percent to $3.4 a barrel.

In a preliminary earnings statement on Oct. 21 Orlen said its Ebit would be about 750 million zloty.

Brent oil traded on average at $112.1 a barrel in the third quarter, or 46 percent higher than a year ago, Bloomberg data shows.

--Editors: James M. Gomez, Chris Peterson

To contact the reporter on this story: Maciej Martewicz in Warsaw at

To contact the editor responsible for this story: James M. Gomez at

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