In 2012, LOTOS generated revenue of PLN 33.1bn, up by 13.2% relative to 2011. Its operating profit for the period amounted to PLN 301m, and the net profit was PLN 923, which means a 42% growth year on year.

The improved financial performance in 2012 is attributable mainly to higher prices of petroleum products on the global markets, appreciation in the average annual exchange rate of the U.S. dollar, and a 1.4% increase in the sales volume, which reached nearly 10,160 thousand tonnes. The higher sales volume was achieved on the back of a 5.6% increase in oil throughput at the Gdańsk refinery. This, in turn, was made possible by the successful implementation of the 10+ Programme.

- The past year was not an easy one for the fuel industry. Despite that, LOTOS consistently grew its sales volumes and market shares, which had a positive effect the company's performance - said Paweł Olechnowicz, CEO of Grupa LOTOS S.A. The Optimum Expansion Programme pursued in 2012, which produced savings of PLN 446m across the Group, also had a material bearing on LOTOS operations. By implementing the Programme we demonstrated that LOTOS can go through the time of economic hardship without slowing down its development. This year, we will continue to be guided by the same objectives.

Based on the initial assumptions, the Optimum Expansion Programme was to yield savings to the order of PLN 257m by further improvement in the cost structure and management efficiency, however, without cutting the scope of the investment projects. Successful implementation of the Programme proved an effective weapon for the Group to fight the economic slowdown in the second half of 2012.

On March 12th 2013, Talisman Energy and SBM Offshore announced that an agreement had been reached concerning the removal of the defective rig from the Yme field. For LOTOS E&P Norge, being the initiator and the chief driving force for this agreement, as well as the holder of a 20% interest in the licence, this means the end of negotiations and the long awaited resumption of technical operations, expected to lead ultimately to the launch of production or sale of the interest, which would be the proper action towards the goal of recovering the funds invested in the project. Part of the incurred expenditure will be recovered by using a tax shield available for companies operating on the Norwegian shelf. Under the agreement, SBM Offshore paid joint venture partners an amount of USD 470m. The agreement was approved by all holders of interests in the Yme licence, including LOTOS E&P Norge.

In 2012, LOTOS consistently put into effect its investment and development plans. The network of LOTOS Optima budget service stations doubled in size, and was the fastest developing retail network on the Polish market. Currently, the LOTOS network comprises 404 service stations, including 107 stations under the LOTOS Optima brand. In 2012, LOTOS' share in the retail market was 8%, compared with 7.6% in 2011.

Grupa LOTOS S.A. entered into a number of agreements significant to its development. In November, it signed an agreement with Grupa Azoty. The two companies agreed to jointly prepare an initial feasibility study for two alternative projects: a pyrolysis (steam cracker) complex with polyolefin production, and an aromatics complex. If the results of the feasibility study are positive, design work on the selected option can start. Grupa Azoty is to be the main customer for the new units' products.

In the same month, an agreement on the acquisition of full control over Manifoldas by LOTOS Geonafta was finalised. The acquisition will enable LOTOS Geonafta to increase its production from deposits in Lithuania.

In September 2012, LOTOS entered into an agreement with PGNiG, concerning cooperation in exploring for and producing crude oil and natural gas from conventional and unconventional deposits as well as trading activities. In 2013, the cooperation will cover four selected licence areas in the Pomerania region. Under the agreement, LOTOS may acquire an interest in each of the licences.

In October 2012, LOTOS Petrobaltic S.A. and CalEnergy Resources Poland Sp. z o.o. agreed upon the terms of cooperation in developing the B4 and B6 gas fields in the Baltic Sea. The fields may produce as much as 4bn cubic metres of gas. The agreement provides for joint operations of LOTOS Petrobaltic and CalEnergy Resources to be carried out through a special purpose vehicle, whose costs and profits will be shared between its owners in the following proportion: LOTOS Petrobaltic - 51%, CalEnergy Resources - 49%.

Communications Office, Grupa LOTOS S.A., ul. Elbląska 135, 80-718 Gdańsk, Poland, tel. (+48) 58 308 87 31, (+48) 58 308 83 88, (+48) 58 308 83 55, e-mail: media@grupalotos.pl