OREANDA-NEWS. September 03, 2010. Unfavourable macroeconomic conditions and tendencies on the market, the still unsettled logistic issues as well as the Refinery shut-down in March have had material effect on the Company’s performance and financial results, reported the press-centre of ORLEN Lietuva.

The income gained by Public Company ORLEN Lietuva during the first half of the year 2010 amounted to USD 2.5 billion. The more favourable macroeconomic conditions in the second quarter and the actions undertaken to make the Company’s performance more efficient enabled the achievement of higher financial results during the particular period.Nevertheless, this was not enough to compensate for the loss incurred during the first quarter.Unfavourable macroeconomic, market-related and logistic conditions have had critical impact on the consolidated results of the Company for the six months of the current year.This was why the Company incurred USD 42 million consolidated net losses during the above mentioned period (as per International Financial Reporting Standards, in consideration of the historical value of assets).

The 1.3 percent GDP growth rate in the second quarter of the year (in comparison to the 16 percent drop in GDP last year) has stabilized the increase in total fuel consumptions – despite the fact that tending-to-grow diesel fuel consumptions were recorded, gasoline sales have decreased.The consolidated net loss incurred by Public Company ORLEN Lietuva during the particular period amounts to USD 11 million.

During the first six months of the current year, Public Company ORLEN Lietuva processed the total of 4.1 million tons of feedstock, 3.96 million tons of which was crude oil; the volume of feedstock processed in the second quarter amounted to 2.32 million tons (2.26 million tons of crude oil).

When giving his opinion and commenting on the performance results for the first half of the current year, General Director of Public Company ORLEN Lietuva Ireneusz Fafara noted that the Company’s results for the first half of the year were substantially impacted by unfavourable macroeconomic conditions as well as the two-week complex unit shut-down which took place in March. Because of the shut-down, the Company’s operating profit has decreased by USD 12.3 million.

The unsettled logistic issues have also had much impact on the results. The negotiations for reduction of rail carriage tariffs set by Lietuvos Gelezinkeliai and recalculation of the rates for loading at AB Klaipedos Nafta Terminal have not been completed yet. The promised by the Government of the Republic of Lithuania restoration of the railway section connecting the Refinery with the Latvian railway system has not been undertaken.

Since the beginning of the year, the Company has been focusing on the increase of its performance efficiency and proceeding with its restructuring program. As for the area of production, Public Company ORLEN Lietuva has achieved better performance results: utilization of refining capacities in the second quarter (with calculation based on the 10 million tons annual throughput) has reached 90 percent, energy efficiency has increased and production-related losses have decreased. Production efficiency has also been growing – if compared to the first quarter, light petroleum product yields have been improved from 72 up to 74 percent. Manpower optimization process allowed reducing fixed operation costs and salary-related expenses by USD 7.6 million in comparison to the second quarter of the previous year.

‘All these factors determine that, irrespective of the difficult macroeconomic situation and the incurred losses, the Company’s financial position is stable and safe. The implemented projects should have positive effect on the Company’s activities not only in the coming year, but also further into the future’, said Ireneusz Fafara, General Director of Public Company ORLEN Lietuva.