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By Letara Draghia •
Published: 15 Nov 2024 • 0:37
• 1 minute read
Polish state-owned Orlen recently revealed a dramatic drop in its profits, reporting a net income of 188 million zloty (€43.3 million) for the third quarter of 2024 – a staggering 96 per cent decline year-on-year.
The announcement has sparked significant criticism, especially from opposition members of Poland’s Law and Justice (PiS) party, who claim that Orlen’s new management is mishandling the company.
Orlen’s former CEO criticises new management
Daniel Obajtek, Orlen’s former CEO under the PiS government, publicly criticised the company’s results, describing them as “disastrous” and accusing the current leadership of “screwing up.” In response, Orlen defended its financial position, citing difficult economic conditions, including a 65 per cent reduction in refining margins and an appreciation of the zloty against the US dollar.
Orlen’s new CEO, Ireneusz Fąfara, explained, “We delivered financial results that are on a par with last year’s”, despite the challenging market.
Orlen’s revenue and market performance
Orlen’s revenue in the third quarter amounted to 67.9 billion zloty (€15.6 billion), down from 75.9 billion (€17.5 billion) in the same period last year. Although the results were sobering, Orlen’s share price rose by more than 3 per cent on Thursday morning.
Orlen also announced a potential 5 billion zloty (€1.15 billion) reduction in capital project spending for this year. Magdalena Bartoś, Orlen’s Vice President of Finance, highlighted the company’s focus on cost control, which investors viewed positively. Looking ahead, Orlen will decide by December 10 whether to continue or halt its largest project: the Olefin III petrochemical plant in Płock. The project’s cost has soared from an initial estimate of 8.3 billion zloty (€1.91 billion) in 2018 to 51 billion zloty (€11.75 billion), which has raised concerns over its viability.
The profit plunge and political backlash make Orlen’s future uncertain, especially for stakeholders monitoring Poland’s energy sector.
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