Grupa Lotos SA (LTS.WA) Thursday said consolidated fourth-quarter net profit more than doubled, helped by inventory valuation, a stronger Polish currency and improved refining margins.
Poland's second-largest oil refiner and retailer said consolidated net profit for the three months ended Dec. 31 was 231.2 million zlotys ($99.4 million), up from PLN99.5 million in the same period the previous year.
The refiner's performance was a touch below the consensus forecast of PLN234.4 million in a Dow Jones Newswires survey of six analysts.
Sales rose 26% to PLN3.99 billion from PLN3.15 billion a year ago. Analysts had expected sales of PLN3.74 billion.
Lotos shares have fallen 16% this year, reflecting investors' view that the company is unlikely to show increased profits before an ambitious upgrade and investment program is completed in 2010.
The shares closed Wednesday at PLN37.32, down 1.8%. Poland's blue-chip index WIG20 has fallen 13% since the beginning of the year.
In the full-year period, Lotos consolidated net profit was PLN763.5 million, up 12% on year. The result exceeded management guidance of PLN713 million and was only a touch below market expectations of PLN764.3 million.
Lotos' earnings before interest and taxes, or EBIT, doubled on year to PLN158.6 million. That was well below analysts expectations of PLN265.7 million.
The main driver behind the result was revaluation of crude oil and refined products inventories, which increased the operating profit by PLN158.1 million, Lotos said.
Another positive driver was strong zloty, which contributed to a financial gains on hedged export contracts and boosted the bottom line, the company said.
However Lotos, wrote down PLN42.3 million due to asset revaluation and provisioning.
Stronger refining margins helped Lotos operating performance and as result its refining segment improved its performance and delivered an operating profit of PLN162 million, from the PLN41 million in the year-earlier period.
Lotos' oil exploration and production arm, Petrobaltic, contributed PLN27 million to the group's operating profits, down 58% on year, despite higher crude oil prices.
The company's retail segment saw a deterioration, with operating loss widening to PLN26 million from PLN22 million.