PKN Orlen says zloty falls to hit Q2 net profit

Top Polish refiner PKN Orlen said Thursday that second-quarter net profit would be hit by foreign exchange losses, although operating profit could remain steady on the year on oil price gains.

Using a more stringent accounting methodology, LIFO, which does not include the inventory revaluations, operating profit in the quarter was around 700 million zlotys ($227.7 million).

The official results on Aug. 31 will include the efffect of oil price rises on the value of its stocks, and so operating profit could reach 1.1 billion zlotys, analysts said. PKN said it had been hit by 1.1 billion zlotys in financial costs, most of which were from falls in the value of the zloty, which would drag net profit lower, to close to zero, said analysts.

PKN also said in the Thursday trading statement that oil refining output grew 11 percent quarter-on-quarter and 5 percent year-on-year, reaching 6.9 million tonnes.

"In the second quarter of 2010 further improvement of basis macroeconomic factors was visible, affecting PKN's results," the company said.

Source:   Reuters