In Q1 2020 ORLEN Lietuva Group recorded:
- 800 MM USD income;
- 190 MM USD negative EBITDA LIFO;
- 153 MM USD net loss;
- 17 percent drop in total sales volume;
- 80 percent refinery capacity utilization.
Tense macro situation and global COVID-19 pandemic had significant impact on the results of first quarter of ORLEN Lietuva. Downturn in crude oil refining sector has negatively reflected on financial results of ORLEN Lietuva - its net operating profit and EBITDA LIFO.
If to compare Q1 2020 vs Q1 2019, the income of ORLEN Lietuva dropped down by 30 percent to 800 million USD which resulted in net operating loss of 153 million USD vs 29 million USD profit in Q1 2019. EBITDA LIFO this year was negative hitting its lows of minus 190 million USD for Q1 2020 vs plus 54 million USD in Q1 2019. Such figures resulted from sudden drop of global prices of crude oil and petroleum products as well write-down of inventories to their net realizable value.
With countries on lockdown due to COVID-19 there is significantly less of all activity thus the demand for petroleum products has decreased in most markets of ORLEN Lietuva. Therefore total sales volumes in 1Q 2020 fell down by 17 percent vs 1Q 2019. Seaborne sales decreased by 34 percentage points, inland sales by 4 percent where the drop of sales to Baltic States could be at least partially covered by increased sales to CIS and other inland markets.
'Extraordinary decrease of crude oil and petroleum product prices had significant impact on entire crude oil refining business in Europe. Industry suffers from imbalance of oversupply and less demand', said General Director of ORLEN Lietuva Mr. Michal Rudnicki. 'Unfavorable macroeconomic conditions may continue therefore in the nearest months ORLEN Lietuva will focus on the search and implementation of solutions allowing to improve financial situation.'
On 29 April, Mažeikiai refinery had its 40th birthday. ORLEN Lietuva is one of the biggest strategic companies and exporters in Lithuania. The company operates the only crude oil refinery in the Baltic States ensuring energy security within the region supplying petroleum products to Lithuania, Latvia, Estonia, and Poland.
Since 2006, PKN ORLEN has spent nearly 4 billion US dollars on the acquisition and further investments in the refinery of Mažeikiai. ORLEN Lietuva has recently become a member of an integrated petrochemical chain of PKN ORLEN.
PKN ORLEN is a modern player on the fuel and power market and the largest company in Central and Eastern Europe. It was listed among the prestigious Fortune Global 500.
ORLEN Lietuva inf.