In the first quarter of 2017, LOTOS reported a consolidated net profit of PLN 411 million, up 287% year-on-year.

From January to March 2017, the consolidated EBIT stood at PLN 577 million, an increase of 318% year-on-year, and the EBITDA LIFO (without one-off effects) totalled PLN 682 million, up 25% year-on-year.

In the first quarter of 2017, LOTOS reported an operational cash flow of PLN 145 million which was PLN 174 million less than in the same period a year earlier. This was related to the changes to the company’s working capital as a result of the overhaul shutdown of the refinery in Gdańsk.

As of 31 March, 2017, the company’s debt stood at close to PLN 4.9 billion, an increase of PLN 70 million compared with the level from 31 December, 2016, but the net debt against EBITDA LIFO (without one-off effects) ratio was 1.8, an improvement from 1.9 in end-2016 and 2.6 in end-2015.

The share of Russian crude oil in the refinery’s processing activities fell to 68% in the first quarter of 2017.

Improved financial results of the upstream segment

LOTOS Petrobaltic’s daily production in Norway, Poland and Lithuania stood at about 25,900 boe (barrels of oil equivalent) in the first quarter of this year, down 14% year-on-year. From January to March 2017, LOTOS Petrobaltic produced more than 2.3 million boe, down 15% year-on-year.

The upstream segment’s operational result stood at PLN 182.4 million in the first quarter of 2017, an increase of 2,543.5% year-on-year, and its EBITDA was PLN 265.5 million, up 76.2% year-on-year. These results were impacted, among others, by the increase in the average quarterly crude oil price, up 58.6% year-on-year, and natural gas, an increase of 37.2% year-on-year, as well as the higher average quarterly USD/PLN exchange rate, up 2.5% year-on-year.

„Spring 2017” overhaul shutdown on schedule and budget

In the first quarter of 2017, the nominal processing capacity of the refinery in Gdańsk was used in 97.7%, up 4.3 percentage points with the exclusion of the overhaul shutdown period. The refinery had a stable performance, maintaining its crude processing activities at the level of 1.9244 million tonnes in this period.

LOTOS reported quarterly sales of petroleum products of 2.272 million tonnes, only 6% less than in the same period a year earlier despite the refinery’s overhaul shutdown. It is noteworthy that, from January to March 2017, LOTOS increased its domestic sales of diesel fuel by 21% which indicates another quarter of the fuel’s higher sales in Poland. The introduction of new regulations to limit the so-called shadow economy in fuel trading were of particular importance for this development.

The works that were launched on 3 March, 2017, as part of the planned “Spring 2017” overhaul shutdown were completed in line with the time schedule and on budget. Their scope included all of the 54 units of the refinery in Gdańsk, 2,500 pieces of equipment and pipeline sections, more than 3,500 devices and fittings, and 370 so-called pipeline hook-ups which enable sequential switching, starting-up and testing of the new units developed under the EFRA programme without influencing the performance of the refinery’s existing units.

The completed overhaul shutdown was the largest undertaking of this kind in the company’s history due to the fact that it also covered all the units of the 10+ Programme that were built in the years 2007 to 2011.

During the „Spring 2017” overhaul shutdown, about 3,500 employees from more than 100 external companies worked at the refinery, and, together with the employees involved in the EFRA Project, close to 5,000 persons were involved in various works. In addition to reviews, replacements of apparatus and devices, repairs and cleaning of pipelines, tens of thousands of inspections, checks and diagnostic tests were performed under the supervision of the Office of Technical Inspection to approve the tested equipment for further operation.

The completed overhaul shutdown is to ensure the refinery’s undisturbed performance over a period of at least four years. This long-term perspective is a result of, among others, the Risk Based Inspection (RBI) programme that has been implemented over the past several years, allowing a more precise evaluation of the technical state of pipeline sections and refining equipment. To date, the RBI programme has been implemented at the 15 most important units of the refinery in Gdańsk.

Under the EFRA Project, design work and purchases and deliveries of devices and equipment for the investment were finalised in the first quarter of 2017. The project's state of development, regarding the design, purchasing and construction-assembly works, was about 68.2% as of end-March 2017, compared with the planned level of 59.8%.

Higher fuels sales at LOTOS petrol stations

In the first quarter of 2017, LOTOS’ petrol stations sold 255,000 tonnes of fuels, up 4.9% year-on-year. The operational profit of the retail segment was PLN 2.2 million, an improvement from the PLN 0.4 million loss in the same period a year earlier, and its EBITDA stood at PLN 20 million, up 22% year-on-year.