PKN Orlen profits and revenues down in second quarter

PKN Orlen, a group which controls 40% of the national oil market, said on Tuesday that its second-quarter net profit fell 43% year-on-year to zl. 115 million, hit by thin refining margins and weaker fuel prices. The results, compiled under international accounting standards (IAS), came in below market expectations of zl. 175 million. The figures also show that operating profit slumped 34% year-on-year to zl. 206 million. "The difference in refining margins was a key factor behind the result, so a weaker performance was to be expected," said Rafal Jankowski, a sector analyst at Bank Pekao in Warsaw. PKN CEO Zbigniew Wrobel said he expected the effects of all this to continue into the third quarter, but to be partially offset in overall earnings by a cost-cutting program and higher retail margins. "We do not really expect miracles in the third quarter, but we believe that we will buck the trend," he told analysts on a conference call. The company said its sales revenues slumped to zl. 3.9 billion in the quarter from zl. 4.3 billion a year ago, hurt by weak fuel prices, despite a 3.3% year-on-year increase in sales volumes. However, the result was an improvement from the first quarter, when net profit came in at zl. 66 million. (Reuters)