07/24/2020 | Press release | Distributed by Public on 07/24/2020 14:34

Estimates of LOTOS Group’s Q2 2020 consolidated operating results

Estimates of LOTOS Group's Q2 2020 consolidated operating results
Report no. 22/2020 2020-07-24 • 22:30

The Management Board of Grupa LOTOS S.A. (the 'Company') hereby publishes estimates of the LOTOS Group's Q2 2020 consolidated operating results:

  1. Estimated consolidated revenue: PLN 4 245 m
  2. Estimated consolidated normalised LIFO-based EBITDA: PLN 45 m
  • Estimated normalised LIFO-based EBITDA of the refining and marketing segment: PLN 15
  • Estimated normalised LIFO-based EBITDA of the exploration and production segment: PLN 46 m

The Company further announces that:

  1. Fluctuations in its oil inventories and differences between the volumes purchased and processed during Q2 2020 resulted in the cost of crude oil processed, based on the LIFO (First in First out) inventory method, being calculated at a higher unit cost than the currently prevailing price, as the effect of old (significantly more expensive) oil inventories.
  2. This effect reflects a shortcoming of the adopted inventory measurement model, which - in the context of a steep decline in crude oil prices - distorted the Group's LIFO-based result for the period, without affecting its cash flows from operating activities.
  3. This negative effect on the LIFO-based result is estimated at approximately PLN 369m:
  • LIFO effect down by approximately PLN 369m,
  • normalised LIFO-based EBITDA down by approximately PLN 369m.

The attached slide illustrates the LIFO measurement mechanics, as well as the estimated effect of one-off items on the reportable segments.

The presented figures are initial estimates, subject to revision. Their final amounts will be published in the interim H1 2020 report, due to be issued on August 12th 2020.

Legal basis: Article 17(1) of MAR - Inside information