Petro-profits

The first quarter of 2008 brought PKN Orlen revenues of zł.17.9 billion, representing a 34-percent y/y growth. The net profit for shareholders of the group's dominant firm was zł.626 million, up from zł.49 million in Q1 last year.

According to the firm, its revenues were boosted by rising demand for diesel oil and by a booming market for fertilizers.

The group saw growth in all the areas of production. Oil processing and refinery production grew by 13 percent each, petrochemical production grew by 38 percent and chemical production grew by 12 percent.

Orlen also announced that output at Mazeikiu, its Lithuanian oil refinery, exceeded 2005 levels for the first time since a fire damaged the facility in March 2006.

In same period, Lotos saw revenues of zł.3.5 billion, up by 40 percent on last year. The firm also had a zł.279-million net profit, representing a y/y growth of around 343 percent.

Revenue growth was partly attributed to a seven-percent y/y growth in the volume of oil-product sales, with the total volume reaching 1.7 million tonnes. Growth in the processing capacity of the firm's Gdańsk refinery and global growth of oil and oil-product prices also contributed to Lotos' increased revenues.

The total sales volume in Q1 2008 for Lotos was 111,000 tonnes higher than in Q1 2007.

The company is not going to pay dividends for its 2007 net profit in order to fund its "10+" investment program. "We are entering a phase of increased investment spending and when this stage is over we may start paying dividends," said Paweł Olechnowicz, the president of the company.    

Both companies' strong results stem from rising oil prices and a surplus of foreign exchange gains which helped cover operating costs, according to Ludomir Zalewski, an analyst with PKO BP Securities.