PKN Orlen SA said its first-quarter profit rose 11-fold from a year ago, exceeding analysts’ expectations as Poland’s biggest oil company’s refining business benefited from falling crude prices.
Net income rose to 756 million zloty ($203 million) from 64 million zloty a year ago, the Plock, Poland-based company said in a regulatory filing on Thursday. The average estimate in a Bloomberg survey of 10 analysts called for 204 million-zloty profit.
Refining margins, which widened as the global price of oil dropped from a year ago, and a weaker zloty against the dollar boosted earnings by 1.1 billion zloty, the state-controlled company said in the statement. Its Lithuanian refinery, which Orlen considered closing last year due to worsening results, posted net income of 175 million zloty in the first quarter.
The refining margin rose to $7.5 a barrel in the first quarter compared with $1.3 a year earlier, it said. The company estimates that the average margin for the entire 2015 will be slightly above the 2014 level, while it also predicts that the Brent oil price will stabilize now temporarily and gain later in the year due to an economic rebound.
The average price of oil fell in the first quarter to $48.7 a barrel from $98.6 a year earlier, while the zloty traded at an average of 3.72 per dollar this quarter versus 3.05 per dollar last year.
Orlen shares dropped 0.9 percent to 64.74 zloty at 9:19 a.m. in Warsaw, falling for the first time this week.