PKN ORLEN S.A. ('Company') informs that it predicts that following accounting one-offs, which affected significantly the financial data for the 2 quarter 2020 will be included in consolidated financial statement for the 1 half 2020:

- reversal of a impairments on inventories to the level of net realizable value in the amount of ca. PLN 2 103 m (i.e. ca PLN 1 207 m acc. to LIFO). The reason of reversal of impairments is an increase of crude oil prices in the second quarter of 2020 and increase of products sales prices due to gradual improvement of demand situation in connection with unfreezing of world economies. The estimated value of reversal of a impairments on inventories will increase consolidated EBITDA of ORLEN Group for the 1 half of 2020 and the 2 quarter 2020.

- recognition of profit on bargain purchase in the amount of ca. PLN 3 690 m in connection with acquisition on 30 April 2020 of Energa S.A. shares representing ca. 80% of the share capital of Energa S.A. and corresponding to ca. 85% of the total number of votes at the General Meeting of that company. Profit on bargain purchase will be recognized under temporary settlement of Energa S.A. share purchase transaction and it is an excess of PKN ORLEN share in the net fair value of the acquired identifiable assets, liabilities and conditional liabilities of Energa Group over the shares purchase price. That amount will increase the level of EBITDA of ORLEN Group for the 1 half of 2020 and the 2 quarter 2020.

- recognition of impairments of assets in ORLEN Upstream Sp. z o.o. with the total value of ca. PLN (133) m. The estimated value of impairments results from decision to resign from the discovering, exploration and production of crude oil and natural gas concession on the Bieszczady area and will decrease the consolidated EBTDA of ORLEN Capital Group for the 1 half of 2020 and the 2 quarter 2020.

Moreover, in the unconsolidated financial statement for the 1 half 2020, the Company predicts also reversal of impairment on inventories to the level of net realizable value in the amount of ca. PLN 989 m (no impairment in results acc. to LIFO), resulting from increase of crude oil prices and products sales prices in the 2 quarter 2020. Estimated value of reversal of impairments on inventories will increase the unconsolidated EBITDA of PKN ORLEN for the 1 half of 2020 and the 2 quarter 2020.


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PKN Orlen SA published this content on 27 July 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 27 July 2020 16:20:01 UTC