Polish refinery Orlen reports losses in the second quarter due to tax payments and lower gas prices

Orlen said its second-quarter profit before depreciation and amortisation, net of the impact of crude oil price fluctuations on the value of inventories (EBITDA LIFO) and excluding depreciation and regulatory payments, rose 8% year-on-year to PLN 11.31 billion, confirming an earlier estimate.

A special tax to stabilize gas prices for vulnerable consumers cost the company 7.7 billion zlotys in the second quarter, more than twice the 3.7 billion zlotys in the same period last year.

Margins in the refinery’s petrochemicals business remained under pressure, recording an operating loss of 842 million zlotys, the company said.

In the refining business, operating profit rose 25 percent to PLN 2.2 billion in the second quarter as higher sales volumes and a one-off insurance compensation helped offset weaker margins.

The Upstream segment recorded a quarterly loss of over PLN 5.3 billion due to the special tax and the fall in gas prices, which also affected the operating profit of the Gas segment, which fell by 51 percent year-on-year to PLN 3.6 billion.

The company said capital spending reached PLN 14.0 billion in the first half of the year and that the full-year plan was cut by PLN 3.3 billion to PLN 35.3 billion.

The company added that oil prices are likely to increase year-on-year as global demand increases and margins in the petrochemicals business are expected to improve.

(1 US dollar = 3.8370 zloty)

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