Orlen (PKN) Q1 2024 earnings summary

Executive summary

• Q1 revenue was PLN 82.33bn, EBITDA LIFO PLN 8.4bn and net income PLN 2.785bn, all down YoY.

• Results reflected normalized refining and commodity margins, lower energy prices and a PLN 7.7bn gas impairment in Upstream.

• Operating cash flow was PLN 11.67bn, supported by a PLN 5.61bn working-capital release; quarter-end net debt was PLN 780m.

Financial highlights

• Revenue fell PLN 33.50bn YoY to PLN 82.33bn; EBIT was PLN 4.32bn versus PLN 12.72bn, and EBITDA was PLN 7.73bn versus PLN 16.54bn.

• Net income was PLN 2.785bn versus PLN 9.471bn YoY; net income attributable to parent shareholders was PLN 2.77bn and EPS PLN 2.38 versus PLN 8.03.

• Free cash flow was PLN 1.9bn versus PLN 10.2bn in Q1 2023; quarterly CAPEX rose to PLN 6.4bn from PLN 5.3bn.

• Net operating cash flow was PLN 11.67bn; investing outflow was PLN 9.78bn and financing outflow PLN 3.65bn. Cash ended the quarter at PLN 11.41bn.

Outlook and guidance

• 2024 planning assumptions: Brent ~$85/bbl, natural gas PLN 150/MWh, refining margin ~$12/bbl and electricity PLN 400/MWh.

• Management expected the regulated gas impairment to reduce Upstream results by more than PLN 15bn in 2024; gas-sale compensation was expected to be significantly lower YoY.

• The 2024 CAPEX plan was PLN 38.6bn, including PLN 27.9bn for development and PLN 10.7bn for maintenance.