In the second quarter of 2015, Lotos managed to achieve EBITDA (Earnings before interest, taxes, depreciation, and amortization) at the level of PLN 755 million (+ 69.5% quarter/quarter). Net income was lower (by PLN 101.4 million) in comparison with the first quarter of the year, as it was contained in an amount of PLN 479 million. Data related to the financial results of the Upstream sector is particularly interesting, since this sector, despite the serious price drops within the global markets, has shown an income of more than PLN 100 million. Representatives of Lotos also informed that net debt of the company is currently defined by an amount of PLN 5.6 billion. The increase is not caused by commitment of expenditure, but it is rather a result of the changing currency exchange rates and of the weakened position of dollar. It is worth to note the fact that EBITDA profit/debt ratio is being systematically decreased, at the moment it is placed at the market-acceptable level.
“We are not going to stop. Financial results achieved by Lotos show that last quarter was good, same applies to the first half of the year” - as it was stated by Paweł Olechowicz.
Data pertaining the efficiency of the Gdansk refinery is also positive. The plant processes more than 10 million tonnes of crude oil per annum. Thus, the level of use of the rated processing capabilities reached 100.3%. General increase within the domestic retail sales market is also observable, which, in the eyes of the Lotos management, may also be partially caused by the limited size of the grey market – regardless of the cause, the above constitutes a positive symptom for all of the Polish petroleum companies.
When commenting the II quarter results, Olechnowicz said that he is obviously satisfied, however he expected that the achieved financial ratios would be “a bit better”. The situation within the global market forced the company to undertake operational activities, the aim of which would be to increase the cash-flow and to reinforce the positive trends, so that they are maintained in the future. The fact that Lotos signed a contract with the Italian Kinetics Technology company is another interesting piece of information, within the context of development of the group. Kinetics Technology is the main contractor dealing with the EFRA (Effective Realization) initiative which, in its basic assumption, is going to make it possible to utilize the heavy vacuum residue resulting from the crude-oil processing procedures, which would, in a consequence of the above, enable Lotos to additionally produce ca. 900 thousand tonnes of high-margin fuels, along with 300 thousand tonnes of coke. Lotos also concluded a loan agreement with eight institutions. The agreement finalizes the financing process pertaining the project – amount of the required expenditure is estimated as PLN 2.3 billion. The procedure is going to come to an end in the third quarter of 2018.
“EFRA programme is a natural continuation of the technology-directed development, after the 10+ Programme. Within the upcoming three years, the Polish economy and Lotos would have one of the best refineries in Poland, and the world, at its disposal. Effective implementation of the EFRA programme results in improved management efficiency and reduced costs of operations” - as it was stated by Olechnowicz.
Despite the prolonged talks involving the Polish Armament Group and Nauta repair shipyard, activity of the company related to the B8 deposit close to Rozewie seems to be uninterrupted. President Olechnowicz declared that exploitation of the above-mentioned area is planned to be started next year. Olechnowicz also mentioned the fact that, thanks to the efficient business model, even assuming that the prices are going to be dropped even further, the project would still be economically profitable. President of the Lotos company, pressed by the journalists, stated that, according to his forecast, average annual price for the crude-oil is going to be amounted at the level of ca. USD 60 per barrel, and that we should expect neither rapid increase, nor long-term decrease of its value, below the 50 dollar limit. Nonetheless, within the three upcoming years, it is possible that the prices will rise, up to ca. USD 100.