Orlen Posts Unexpected Fourth-Quarter Loss on Writedowns

PKN Orlen SA (PKN) probably posted an unexpected operating loss in the fourth quarter after Poland’s largest oil company wrote down the value of its Czech refiner.

Loss before interest and taxes narrowed to about 700 million zloty ($228 million) from 1.06 billion zloty a year earlier, the Plock, Poland-based company said in a regulatory filing today. The mean estimate of six analysts surveyed by Bloomberg called for a 464 million-zloty profit. Full-year Ebit was about 2 billion zloty in 2012, compared with 2.07 billion zloty in 2011, according to Orlen’s preliminary earnings.

Orlen wrote down 700 million zloty of assets, mainly at Prague-based Unipetrol AS. (UNIP) That compares with 1.8 billion zloty the Polish company wrote down in 2011.

“The writedown at the Czech unit is a negative surprise,” Tomasz Kasowicz, an analyst at Bank Zachodni WBK SA, said by phone. “Falling demand, the high price of oil, low margins and high delivery costs are the factors that make Czech refiners unprofitable.”

Unipetrol’s fourth-quarter loss probably was 4.5 billion koruna ($236 million), the Czech company said in a separate statement today.

Throughput at Orlen’s refineries in Poland, the Czech Republic and Lithuania increased 4 percent to 7.49 million tons in the fourth quarter from a year earlier. Volume sales at refining and petrochemical units climbed 2 percent and 7 percent respectively, while retail sales declined 3 percent.

State-controlled Orlen will publish final earnings on Jan. 23.

To contact the reporter on this story: Maciej Martewicz in Warsaw at mmartewicz@bloomberg.net

To contact the editor responsible for this story: James M. Gomez at jagomez@bloomberg.net

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