PKN Orlen and Lotos report disappointing results

Polish refiners, PKN Orlen and Lotos have posted lower than expected Q3 earning results, due to the fluctuating currency and operating costs.

PKN's net profit fell 96 percent y/y to zł.21 million, while Lotos plunged to a zł.238 million net loss versus a zł.230 million net profit year earlier. "Both results are pretty weak. PKN, at least, met expectations on the operating side, but it was probably a bigger shock to see such a small profit," said ING analyst Tamas Pletser to Reuters.

The strengthening złoty has affected PKN in the July-September period where the company said the currency has cost it zł.570 million on the operating level. However, both companies did benefit from inventory gains as crude prices rose, but that trend has reversed and the companies are now suffering.  

In terms of revenues, PKN's revenues rose 34 percent to zł.22.1 billion, while Lotos reported an increase of 35 percent to zł.4.7 billion.

Shares in both companies have dropped, with PKN shedding 11 percent and Lotos 5 percent.

Source: Reuters