Summary of Strategy implementation in 2021
In 2021, despite the continuing COVID-19 pandemic, PKN ORLEN managed to consolidate its position and maintain financial ratios at safe levels, posting record-high LIFO-based EBITDA of PLN 14.2 billion.
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The main contributors to this impressive result were: petrochemicals, energy, and refinery. Since 2021, sound financial foundations have also been supported by green bond issues.
Our earnings and stable financial condition, confirmed by safe levels of debt ratios and Baa2 rating from Moody’s, allowed us to grow our CAPEX by PLN 0.9 billion. The Group allocated PLN 9.9 billion to investment projects, which included: construction of a visbreaking unit in Płock, expansion of the olefins production capacity in Płock, expansion of the fertilisers production capacity in ANWIL, upgrades of the existing assets and connection of new customers in the ENERGA Group, construction of a propylene glycol unit in Trzebinia and the R&D Centre in Płock, development of a wind farm project in the Baltic Sea, and launch of another 300 alternative refuelling points (500 in total). Acquisition processes were also continued in 2021, in accordance with the ORLEN2030 strategy.
In line with the ORLEN 2030 strategy adopted in November 2020, PKN ORLEN has resumed the pre-COVID-19 dividend policy, which means paying dividends of at least PLN 3.50 per share, compared with PLN 1.0 in 2020, and maintaining or increasing the distributions in the coming years. This dividend level reflects the Group’s robust liquidity and financial position.
In 2021, PKN ORLEN was again awarded the titles of The World’s Most Ethical Company 2021 and Top Employer Polska 2021.
| Item | Actual 2021 |
Strategy 2030 Average 2021-2025 |
Difference (2-3) |
|---|---|---|---|
| 1 | 2 | 3 | 4 |
| Brent crude oil price [USD/bbl] | 70.9 | 57.8 | +13.1 |
| Model Refining Margin [USD/bbl] | 2.4 | 4.1 | -1.7 |
| Urals-Brent differential [USD/bbl] | 1.9 | 1.48 | +0.42 |
| Model Petrochemical Margin [EUR/t] | 1,273 | 884 | +389 |
Key success factors for the strategy
| UoM | Actual 2021 | Actual 2020 | |
|---|---|---|---|
| LIFO EBITDA before impairment1, including: | PLN bn | 14.2 | 12.4 |
| Refining | PLN bn | 3.6 | 0 |
| Petrochemicals | PLN bn | 4.3 | 2.3 |
| Energy | mld PLN | 3.7 | 7.7 |
| Retail | PLN bn | 2.9 | 3.2 |
| Upstream | PLN bn | 0.4 | 0.3 |
| Financial leverage | % | 23.3 | 31.0 |
| Net debt/LIFO EBITDA (before impairment losses) | X | 0.80 | 1.02 |
| Share of Polish fuel market2 | % | 49.8 | 52.6 |
| Refining capacity utilisation | % | 85 | 84 |
| Processing of crude oil in the ORLEN Group | PLN bn | 29.9 | 29.5 |
| PKN ORLEN’s fuel yield | % | 82 | 82 |
| Net electricity generation | TWh | 11.4 | 8.9 |
| Share of fuel sales in home market2 | % | 15.2 | 15.7 |
2 As of the end of the year.
