Lotos warns of lower Q3 profit

Net profit at Grupa Lotos, Poland's second-largest oil refiner, will come in lower in the third quarter than in Q2 this year, the company's deputy CEO warned last week, citing both declining oil prices and a weaker złoty.

"There are no chances for the second-quarter net profit to be repeated in the third quarter," Mariusz Machajewski told reporters on the sidelines of the Krynica Economic Forum last week.

In the second quarter of this year, Lotos posted a profit of zł.397 million. Third quarter results will take a hit from foreign-exchange hedging losses and a negative evaluation of the firm's oil reserves.

Lower oil prices will also force the company to re-evaluate its inventories, which were booked at well above current prices at the beginning of the quarter.

"The operating results will be decent, but the one-off factors will lower the results," Machajewski said. (Reuters)