GDANSK, Poland, Feb 19 (Reuters) - Polish energy group Orlen reported a lower-than-expected fourth-quarter net profit on Thursday, as a surge in refining margins failed to fully counter lower gas and
Orlen's Refining Profits Soar Despite Impairment Challenges
GDANSK, Poland, Feb 19 (Reuters) - Polish energy group Orlen reported higher-than-expected adjusted core earnings on Thursday, helped by a stronger downstream result that overshadowed a net profit miss caused by asset impairments and lower oil and gas prices.
As of 0849 GMT, the shares were up 2.2%, boosting Poland's blue-chip index WIG20, which rose 0.5%.
Orlen's Financial Performance in Q4
"Overall 4Q25 was a good period for the Polish energy giant," said Tamas Pletser, an analyst at Erste Group, highlighting the "very strong contribution of refining" in a supportive margin environment.
Orlen's model refining margin spiked in the fourth quarter as sanctions and Ukrainian drone attacks on Russian infrastructure curbed diesel exports.
This downstream boost cushioned a broader commodity slump, with Brent crude falling nearly 15% and gas prices retreating from year-ago highs.
Impact of Refining Margins and Market Conditions
The state-controlled group's earnings before interest, taxes, depreciation and amortisation adjusted for the value of inventories and impairments, or EBITDA LIFO, declined 15% to 12.15 billion zlotys ($3.40 billion) in the quarter, but beat analysts' consensus of 11.4 billion zlotys.
However, Orlen's quarterly net profit of 3.13 billion zlotys fell short of the 4.8 billion zlotys expected by analysts it had polled ahead of the result publication.
The bottom line was weighed down by net impairment losses of 3.34 billion zlotys on non-current assets, the fourth-quarter report showed.
Impairment Losses and Financial Adjustments
This included a 2.2 billion zloty impairment in the downstream segment, which includes refining and petrochemical business and "New Chemistry", a scaled-down version of Orlen's Olefins petrochemical investment designed to cut costs.
Orlen said it planned capital spending of 36.3 billion zlotys for 2026, up from 32.6 billion zlotys last year.
Key projects set to be completed this year include Poland's first offshore wind farm on the Baltic Sea and a gas-fired power plant in the city of Grudziadz in northern Poland.
($1 = 3.5729 zlotys)
(Reporting by Rafal Nowak and Marek Strzelecki;Additional reporting by Adrianna Ebert and Anna Jaworska-Guidotti;Editing by Milla Nissi-Prussak)
