Orlen informs in the announcement that the operating result EBITDA (before payment taxes and without taking into account interest and depreciation) is estimated at approximately PLN 4,958 million. In turn, the operating result EBITDA LIFO (last in, first out), after eliminating asset impairment losses, is estimated at approximately PLN 8,808 million, compared to PLN 10,258 million in the third quarter of 2023. “On the other hand, impairment losses on net fixed assets are estimated at approximately PLN -3,526 million. The impact of the regulations on LIFO EBITDA is estimated at approximately PLN 678 million” – says the company.
A multi-billion write-off. In the background, the Orlen Lietuva Group
As for the multi-billion write-off, Orlen said that it consists primarily of “impairment of fixed assets of the Orlen Lietuva Group and production assets in the petrochemical segment of Orlen SA”. Impairment loss for fixed assets of the Orlen Lietuva Group amounted to approximately PLN 2,421 million. The company from Płock explains that this is mainly due to “changes in expected economic and regulatory conditions, which, due to delays in the implementation of the schedule, wash and growing costs investment in an installation for in-depth processing crude oil implemented in Orlen Lietuva, result in a loss of effectiveness of this investment.” As for the petrochemical segment, the Płock concern reports a write-off of PLN -912 million. Orlen emphasizes “difficult economic conditions” on the petrochemical products market.
Orlen will publish the consolidated report for the third quarter on November 13
In addition, there are those incurred in the third quarter of 2024 investment expenses for the construction of the Olefins III complex. At the same time, Orlen “anticipates including in the separate periodic report for the third quarter of 2024 an impairment loss of shares in Orlen Lietuva in the amount of approximately PLN -4,005 million.” The company adds that the write-off for the impairment of shares is related to “the above-mentioned reasons for performing tests for the impairment of the fixed assets of the Orlen Lietuva Group”. These factors influence the expected lack of future positive cash flows planned by the Lithuanian company of Orlen. The Płock-based concern adds that work is still ongoing on the Group's standalone and consolidated report for the third quarter of 2024, which the company will publish on November 13. “Therefore, the estimates of selected financial data of the ORLEN Group for the third quarter of 2024 presented above may change compared to the financial data that will be included in the final version of the periodic report,” we read in the release.