Strong profit and record-high dividend from the ORLEN Group

The Upstream and Gas segments were the biggest contributors, generating 70% of total EBITDA. Refining and Energy also delivered positive results, each posting an increase in earnings of approximately PLN 2 billion year on year. Meanwhile, the Petrochemicals segment saw a 19% rise in sales, and the Retail segment expanded its market share, achieving its highest-ever fourth-quarter sales volumes.

LIFO-based EBITDA, adjusted for regulatory factors and gas contract valuations, reached PLN 43.5 billion for the full year, largely on a par with the prior year.  With these strong financial results, the Group is well-positioned to share its profits with shareholders. In line with its dividend policy announced in January, the Management Board has recommended a historic dividend of PLN 6 per share for 2024. This includes a guaranteed progressive dividend of PLN 4.5 per share and an additional performance-based premium of PLN 1.5 per share, dependent on the company’s financial position and earnings.

“This was an excellent quarter for ORLEN. We delivered outstanding operational results, unveiled a well-received strategy that drove a double-digit appreciation in our stock price, and generated substantial cash flow, allowing us to offer shareholders a record-high dividend.  Over the past year, one in every ten zlotys paid into the state budget came from ORLEN,” said Ireneusz Fąfara, President of the ORLEN Management Board. “We have discovered new oil and gas reserves, launched large-scale energy investments, and are building both our independence and energy security.  Energy of tomorrow starts today.”

In the fourth quarter of 2024, the Refining segment delivered a LIFO-based EBITDA of PLN 1.5 billion, an increase of nearly PLN 2 billion year on year.  This strong performance was achieved against a backdrop of normalising refining margins, as the segment maintained a high capacity utilisation rate of up to 89%. During the period, the Group’s refineries in Poland, the Czech Republic and Lithuania processed a combined total of 9.6 million tonnes of crude oil. Both Poland and the Czech Republic saw year-on-year rises in fuel yields, while Lithuania experienced a slight decline, due to maintenance projects.

In Petrochemicals, market pressures and macroeconomic challenges continued to weigh on the performance. Despite a 19% increase in sales, the segment posted a negative LIFO-based EBITDA of PLN (-) 748 million.

The Energy segment reported a LIFO-based EBITDA of nearly PLN 2.3 billion, underscoring the strategic importance of this area to the Group’s growth.  The strong result was driven primarily by operational efficiencies compared to the previous year, lower contract prices of natural gas, remeasurement of provisions for CO₂ emissions, and the absence of the obligatory contribution to the Price Difference Compensation Fund. The ORLEN Group’s installed capacity totalled 6.1 GWe, with electricity generation volumes in the fourth quarter amounting to 4.9 TWh. Currently, more than 70% of the Group’s electricity output is generated from renewable sources and gas-fired units.

In the Retail segment, LIFO-based EBITDA reached PLN 660 million, reflecting operational improvements over 2023, growing market share in international markets, and stable year-on-year sales.  Over the year, 347 service stations were added to ORLEN’s retail network, bringing the total to 3,517 locations across seven European countries. Furthermore, ORLEN is consistent in expanding its alternative fuel infrastructure, having increased the number of such stations by 135 year on year, to 869. The non-fuel retail business also continues to grow, with the number of sites offering non-fuel products and services reaching over 2.7 thousand.

The Upstream segment was the largest contributor to overall performance, generating an EBITDA of PLN 5 billion. This was driven by a 9% increase in gas prices, expanded operations in Norway, and the absence of the obligatory contribution to the Price Difference Compensation Fund. Hydrocarbon production rose by 17% year on year, to approximately 216 thousand boe per day.

The Gas segment delivered an EBITDA of PLN 4.4 billion in the fourth quarter of 2024.  It was under pressure from an unfavourable macroeconomic environment, a year-on-year drop in sales margins, and trade contract valuations. On the other hand, higher gas sales and the absence of the obligatory contribution to the Price Difference Compensation Fund supported the segment’s results.  Gas imports were up by 7% year on year, with LNG accounting for 44% of total volumes.  At the end of December, the ORLEN Group’s gas storage inventory at home and abroad totalled 23.5 TWh, representing a 86% storage fill rate.

“The market believes in our vision and the significant potential of the ORLEN Group. This is best evidenced by the strong performance of our stock and the outstanding success of our first-ever bond issue in North America, in which we raised USD 1.25 billion in funding for strategic investments.  We remain focused on efficiency, cost control, and new profitable projects that will strengthen the Group’s long-term competitiveness,” said Magdalena Bartoś, Vice President of the ORLEN Management Board, Chief Financial Officer.

In the fourth quarter of 2024, the ORLEN Group generated PLN 10.4 billion in operating cash flow, doubling last year's figure. At quarter-end, its net debt to EBITDA stood at 0.3x, one of the lowest leverage ratios in the sector, highlighting the Group’s financial stability with strong transformational potential. ORLEN’s highest ever credit ratings were reaffirmed at A3 by Moody’s Investors Service and BBB+ by Fitch Ratings.

In the three months ended 31 December 2024, the ORLEN Group generated:

• Revenue of PLN 77.2 billion
• LIFO-based EBITDA of PLN 12.6 billion
• Operating cash flows of PLN 10.4 billion
• Corporate costs brought down to PLN 419 million

Full-year 2024 financial results were as follows:

• Revenue of PLN 297 billion
• LIFO-based EBITDA of PLN 35.8 billion,
• Operating cash flows of PLN 36.6 billion
• Corporate costs brought down to PLN 1.9 billion.

Throughout 2024, the ORLEN Group made significant investments to secure security of feedstock supplies for Poland. Work was underway to explore new reserves, and hydrocarbon production from newly developed fields was commenced in Poland and Norway.  The Group completed the integration of its upstream companies in Poland. A contract was signed with BP for the supply of 6 million tonnes of crude oil from Norwegian fields in the North Sea, covering approximately 15% of the Group’s annual crude oil requirement.

To mitigate the adverse economic impact of Olefins 3, ORLEN halted the project and repurposed the existing infrastructure as the foundation for its New Chemicals (Nowa Chemia) initiative.

As part of its energy transition strategy, ORLEN commenced installation work on its first offshore wind farm. Two of the planned 78 monopiles – 100-meter structures designed to support 15 MW wind turbines – have already been installed.

In November 2024, ORLEN secured PLN 3.5 billion in funding from the European Investment Bank for strategic network development, including renewable energy connections, network upgrades, and investments in smart grid technology. These efforts will enhance energy security and the efficiency of electricity supply in northern and central Poland.

ORLEN also entered into a EUR 2 billion credit facility agreement with a syndicate of 16 banks. The renewable structure of this facility will enable optimal liquidity management, thereby improving operational efficiency.

Through its debut bond issue in North America, ORLEN raised USD 1.25 billion for strategic investments. The 10-year bonds were issued on highly attractive terms, comparable to interest rates on Polish government bonds.  Investor demand exceeded the issue volume more than threefold, which attests to investor trust and international confidence in the Group’s growth strategy.

The ORLEN Group’s sound financial position and consistent delivery of business goals across all segments made possible the payment of record-breaking dividend of PLN 4.15 per share for 2023, as recommended by the Management Board. As a result, on 20 December 2024, the company distributed nearly PLN 4.8 billion to shareholders.

Energy security, modernisation, sustainability, and the development of the product and service portfolio form the pillars of the ORLEN Group’s new strategy.  Over the next decade, the Group aims to secure gas supplies of 27 billion cubic metres annually, fully meeting Poland’s needs.  ORLEN also plans to achieve 12.8 GW of renewable energy capacity, 4.3 GW in gas-fired power generation, 600 MW from small modular reactors, and 1.4 GW in large-scale energy storage facilities.

Following corrective measures by the current Management Board, ORLEN regained the trust of Norges Bank Investment Management and was removed from its watch list, where it had been placed after acquiring the media company Polska Press under the previous management. Norges Bank removed ORLEN from the list a year earlier than expected, recognising that the actions of the current Management Board effectively mitigated previously identified risks.