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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 financial position
Consolidated statement of financial position for 2014
| PLN ’000 | Note | Dec 31 2014 | Dec 31 2013 | Jan 1 2013 |
|---|---|---|---|---|
| (restated) | (restated) | |||
| ASSETS | ||||
| Non-current assets | ||||
| Property, plant and equipment | 13 | 9,485,654 | 10,009,073 | 9,644,600 |
| Goodwill | 14 | 46,688 | 46,688 | 46,688 |
| Other intangible assets | 15 | 553,687 | 658,797 | 496,386 |
| Equity-accounted joint ventures | 16 | 99,599 | 129,798 | 85,214 |
| Deferred tax assets | 10.3 | 1,488,901 | 924,534 | 1,121,314 |
| Other non-current assets | 18 | 107,288 | 210,981 | 107,232 |
| Total non-current assets | 11,781,817 | 11,979,871 | 11,501,434 | |
| Current assets | ||||
| Inventories | 19 | 3,917,129 | 5,728,884 | 5,963,027 |
| - including mandatory stocks | 19.2 | 2,243,655 | 4,250,530 | 4,353,207 |
| Trade receivables | 18 | 1,406,501 | 1,591,649 | 1,625,715 |
| Current tax assets | 59,596 | 76,711 | 90,566 | |
| Derivative financial instruments | 28 | 4,430 | 73,935 | 121,334 |
| Other current assets | 18 | 1,419,034 | 337,071 | 434,400 |
| Cash and cash equivalents | 20 | 348,215 | 495,839 | 266,104 |
| Total current assets | 7,154,905 | 8,304,089 | 8,501,146 | |
| Non-current assets held for sale (or disposal groups) | 17 | 10,435 | 794 | 2,428 |
| Total assets | 18,947,157 | 20,284,754 | 20,005,008 | |
| EQUITY AND LIABILITIES | ||||
| Equity | ||||
| Share capital | 21 | 184,873 | 129,873 | 129,873 |
| Share premium | 22 | 2,229,626 | 1,311,348 | 1,311,348 |
| Cash flow hedging reserve | 23 | (412,535) | 61,019 | (36,801) |
| Retained earnings | 24 | 6,190,989 | 7,666,833 | 7,627,427 |
| Exchange differences on translating foreign operations | 25 | 65,335 | 20,234 | 33,878 |
| Equity attributable to owners of the Parent | 8,258,288 | 9,189,307 | 9,065,725 | |
| Non-controlling interests | 26 | 175 | 289 | 699 |
| Total equity | 8,258,463 | 9,189,596 | 9,066,424 | |
| Non-current liabilities | ||||
| Borrowings, other debt instruments and finance lease liabilities | 27 | 4,495,562 | 4,496,190 | 4,462,098 |
| Derivative financial instruments | 28 | 62,626 | 52,876 | 88,325 |
| Deferred tax liabilities | 10.3 | 55,527 | 275,823 | 313,716 |
| Employee benefit obligations | 29 | 185,451 | 151,425 | 129,862 |
| Other liabilities and provisions | 30 | 657,563 | 705,688 | 405,687 |
| Total non-current liabilities | 5,456,729 | 5,682,002 | 5,399,688 | |
| Current liabilities | ||||
| Borrowings, other debt instruments and finance lease liabilities | 27 | 2,168,106 | 1,715,196 | 2,094,602 |
| Derivative financial instruments | 28 | 135,917 | 21,277 | 91,000 |
| Trade payables | 30 | 1,692,839 | 2,395,237 | 2,169,408 |
| Current tax payables | 4,667 | 8,823 | 5,752 | |
| Employee benefit obligations | 29 | 84,038 | 103,973 | 109,971 |
| Other liabilities and provisions | 30 | 1,137,310 | 1,168,650 | 1,068,163 |
| Total current liabilities | 5,222,877 | 5,413,156 | 5,538,896 | |
| Liabilities directly associated with non-current assets (or disposal groups) held for sale | 17; 29.1 | 9,088 | - | - |
| Total liabilities | 10,688,694 | 11,095,158 | 10,938,584 | |
| Total equity and liabilities | 18,947,157 | 20,284,754 | 20,005,008 |
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)
