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Financial information
The past year ushered in a series of challenges for the companies in the fuel sector. The decisions made by us have demonstrated that we are able to take rapid steps to adapt to a demanding environment and ensure the desired profitability for our projects.
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Segment performance
The segmental management model we have implemented enhances management efficiency, delivering cost and revenue synergies across the organization.
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Letter from the Vice-President of the Board
2014 ushered in a series of challenges for the companies in the fuel sector. The decisions made by the LOTOS Group have demonstrated that we are able to take rapid steps to adapt to a demanding environment and ensure the desired profitability for our projects.
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Business environment
The key factor that had a strong impact on both the global and Polish petroleum markets in 2014, with significant consequences for the LOTOS Group’s performance, was the price of crude oil, which also determined the price of petroleum products.
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Strategic objectives
The LOTOS Group’s Strategy is designed to strengthen our position as a strong, innovative and efficient business which plays a major role in ensuring national energy security.
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Business model
Our operations consist in crude oil production and processing, as well as wholesale and retail sale of petroleum products, among which are: fuels (unleaded gasoline, diesel oil and light fuel oil), heavy fuel oil, bitumens, aviation fuel, naphtha, propane-butane LPG and base oils.
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Risk and opportunities
At the LOTOS Group, we identify a range of diverse risks, which may affect all areas of our business. The key risks in terms of their impact on our operations are the financial risks as well as risks affecting the exploration and production area. In the analysis of the risks, we also factor in issues related to sustainable development.
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Key data 2014
With revenue of ca. PLN 28.5bn in 2014, we rank fourth in the group of 500 largest businesses in Poland.
Consolidated statement of comprehensive income
Consolidated statement of comprehensive income for 2014
| PLN ’000 | Note | Year ended Dec 31 2014 |
Year ended Dec 31 2013 |
|---|---|---|---|
| (restated) | |||
| Revenue | 8 | 28,501,887 | 28,559,165 |
| Cost of sales | 9.1 | (27,466,614) | (26,878,863) |
| Gross profit | 1,035,273 | 1,680,302 | |
| Distribution costs | 9.1 | (1,162,071) | (1,106,186) |
| Administrative expenses | 9.1 | (447,055) | (429,177) |
| Other income | 9.3 | 26,707 | 30,869 |
| Other expenses | 9.4 | (845,862) | (22,680) |
| Loss of control of subsidiary | - | 13,472 | |
| Operating profit/(loss) | (1,393,008) | 166,600 | |
| Finance income | 9.5 | 21,740 | 135,159 |
| Finance costs | 9.6 | (727,982) | (342,304) |
| Share in net profit/loss of equity-accounted joint ventures | 16 | (24,465) | (18,131) |
| Pre-tax loss | (2,123,715) | (58,676) | |
| Corporate income tax | 10.1 | 657,343 | 98,104 |
| Net profit/(loss) | (1,466,372) | 39,428 | |
| Other comprehensive income/(loss): | |||
| Items that may be reclassified to profit/loss: | (428,448) | 84,174 | |
| Exchange differences on translating foreign operations | 45,106 | (13,646) | |
| Cash flow hedges | 23 | (584,653) | 120,765 |
| Corporate income tax relating to cash flow hedges | 10.1 | 111,099 | (22,945) |
| Items that will not be reclassified to profit/loss: | (7,317) | (152) | |
| Actuarial gain/(loss) under post-employment benefits | (8,974) | (188) | |
| Corporate income tax relating to actuarial gain/(loss) under post-employment benefits | 10.1 | 1,657 | 36 |
| Other comprehensive income/(loss), net | (435,765) | 84,022 | |
| Total comprehensive income/(loss) | (1,902,137) | 123,450 | |
| Net profit (loss) attributable to: | |||
| Owners of the Parent | 11 | (1,466,326) | 39,415 |
| Non-controlling interests | 26 | (46) | 13 |
| (1,466,372) | 39,428 | ||
| Total comprehensive income/(loss) attributable to: | |||
| Owners of the Parent | (1,902,096) | 123,439 | |
| Non-controlling interests | 26 | (41) | 11 |
| (1,902,137) | 123,450 | ||
| Earnings/(loss) per share attributable to owners of the Parent (PLN) | |||
| Weighted average number of shares (’000) | 11 | 145,027 | 142,717 |
| - basic | 11 | (10.11) | 0.28 |
| - diluted | 11 | (10.11) | 0.28 |
The Notes to the consolidated financial statements are an integral part of the statements.
(This is a translation of a document originally issued in Polish)
