Welcome to the conference call regarding Q1 consolidated financial results of ORLEN Group. My name is Konrad Włodarczyk. I'm Head of Investor Relations Department, and I will moderate this call. The presentation will be delivered by Magdalena Bartoś, CFO. After the presentation, we will open a Q&A session. Just to remind you, the whole meeting will be recorded, and the recording will be available on the first page, and during the presentation, your microphones will be switched off. So let's kick off, and now I give floor to Magdalena.
Thank you, Konrad. Good morning, everyone, and welcome to ORLEN's 2024 first quarter results. It's a pleasure to host you in our earnings call, especially that it's the first one for me in my role as the Group's CFO. I'm joined by my team today, and as Konrad mentioned, we will be ready to answer your questions after the presentation. Let me kick off with a summary of our financial results. We delivered a set of strong operational and financial results in a mixed and, in some areas, still volatile and challenging macro and regulatory environment. Our EBITDA for the quarter was PLN 8.4 billion, compared to almost PLN 20 billion last year. Adverse macro change was responsible for PLN 6.6 billion of the drop, and higher upstream windfall charge added PLN 4.2 billion to our cost base.
We generated close to PLN 12 billion of cash flows from operations, driven by performance. Our balance sheet remains strong, with almost no net debt and key credit ratings confirmed with stable outlooks, and that provides for comfortable headroom as we turn our energy transition plans into action. Regarding shareholders' distributions, we proposed PLN 4.15 per share dividend, in line with the group's policy. And now moving on to take a closer look at market conditions. As mentioned, markets were less favorable this quarter than last year. Refining margins dropped by 13% and reached $16 per barrel. Geopolitical and weather-related events, to name a few most impactful ones, Red Sea logistics constraints, Russian refinery disruptions, and severe weather in the U.S., limited global product supplies and thus supported margins. Brent oil prices seem to have normalized and continue to move in a narrow band.
Nat gas prices have dropped significantly year-over-year, reflecting Europe's security of supplies. With mild winter, high storage levels, and lower consumption that we saw in Q1, a new normal for gas prices has set at almost 50% of last year's levels. Energy prices are driven by lower prices of gas and coal, with increased renewables generation strengthening the effect. Before we continue to review each segment's performance, let me summarize. Q1 was a good start of the year. We have a diversified business with six strong segments, four of which soundly contributed to the group's performance. Refining and retail delivered results in line with our expectations, delivering PLN 2.3 billion and PLN 0.5 billion of EBITDA, respectively. Energy and gas, PLN 2.4 billion and almost PLN 8 billion EBITDA, performed specifically well, given continued macro deterioration. Upstream is facing a combo of less favorable market and regulatory headwinds.
Petrochemicals are suffering from tough micro, macro and landed on breakeven. And now let's take a look at each segment's performance. I will start with refining. In refining, we saw solid performance in normalizing macro environment. This segment enjoyed particularly supporting market conditions last year. REBCO throughput limitations and resulting differential change is responsible for more than PLN 800 million EBITDA drop and added to a negative volume change as well. Softer refining margins impacted our results by another close to PLN 500 million, but it's fair to say that margins remain attractive, relatively attractive compared to historical levels, as we see limited global refining product availability. It was a strong quarter when it comes to refining operations. Assets utilization reached 90%, with 9.5 million tons processed through, and our plants worked as scheduled.
As we have, to a great extent, moved away from REBCO processing, our throughput structure changed to lighter crude, driving higher fuel yields, partially compensating differential-related margins drop. In petrochemicals, tough market conditions continued to challenge our results. All petrochemical product margins were lower than last year, and while we have seen increased sales volumes as a result of lower imports disrupted by logistics constraints, these came at lower margins, at lower trade margins, and no contribution to EBITDA. On a side note, we continue to review expected future returns and cash generation profile of our assets. And as a result, this quarter's review led us to additional impairment of more than PLN 600 million in petrochemical segment. In our energy business, we have reached a milestone of two-thirds of electricity production coming from zero and low-emission assets.
Production was up by 12%, supported by lower gas prices and enlarged renewables portfolio. We continue to focus on green energy, and with our successful acquisition strategy, the growth reached 1 GW of renewables installed capacity. Lower energy prices impacted the segment's EBITDA by roughly PLN 1 billion, which was partially compensated by lower CO2 emission prices. It was a strong quarter for our retail business, where we were able to increase volumes organically, capture higher margins, and expand to a new market, growing our network in Austria. Better commercial results were partially offset by increased fuel stations' operating costs, driven by inflation, higher minimum wages, and growing network. In Upstream, our business faced deteriorating market conditions and regulatory headwinds. We are on track developing the business, which is growing both organically and through acquisitions.
Consolidation of Norwegian KUFPEC assets and ramp-up of Tommeliten Alpha field marked the first quarter as the first quarter when production exceeded 200,000 barrels a day. Today, production in Norway represents 54% of the group's total oil and gas input, output. Macro environment was less favorable, and since roughly three-quarters of our production is gas, we suffered from lower gas prices. As mentioned earlier, Upstream segment was and continues to be significantly impacted by regulations. In the first half of 2024, gas windfall charge will be expensed. Roughly PLN 15 billion of gas windfall charge will be expensed to our P&L in equal monthly installments, and in the first quarter alone, we paid PLN 7.7 billion, an increment of PLN 4.2 billion compared to last year. Gas segment was the largest contributor to the group's EBITDA this quarter.
Sales reaching 96.3 TWh, staying short by 2% compared to last year. We saw a mid-single-digit increase in sales to our wholesale clients, which is promising, with other client demands, demand rather flattish. Lower gas prices naturally had an effect, negative effect on our earnings in the segment, partially mitigated by hedging and stronger PLN. We managed to drive attractive spread between gas, gas sales and purchase price, mostly thanks to positive impact of lower price of spot gas withdrawals. Moving on to CapEx and our growth projects. As a reminder, we plan to invest more than PLN 38 billion into our asset base this year, out of which roughly two-thirds is allocated to growth projects. CapEx for the quarter reached PLN 6.4 billion.
Upstream segment is expected to consume the largest share of our planned CapEx as we move on to production phase in our Tommeliten Alpha and Fenris field, as well as Yggdrasil area. We also expect Olefins project in Płock to incur more than last year's CapEx . Energy segment-related CapEx is well on track to deliver this year's objectives, focusing on energy transformation through our offshore gas-fired units and renewables, as well as investments in distribution assets. There are several projects improving our refining operations, as an example, hydrocracking in Lithuania, and enhancing biofuels production, including an HVO and bioethanol unit. Lastly, let's discuss our expectations related to market conditions for the remainder of the year. We expect crude oil demand to slightly nudge the Brent price up. Gas prices seem to lack major bullish influences as storage is high, demand buildup rather slow, and contracted input volumes high.
Refining margins seem relatively attractive and will but will face pressure coming from new refining capacities. Energy prices will be driven by renewables production and CO2 emission prices. Petrochemical margins may see some improvements with lower gas prices and improving economic growth in Europe. So to summarize, Q1 was a good start of the year, a quarter of strong operational results and solid financial performance. For the rest of 2024, we will keep driving performance while addressing the challenging market, focusing on what we do best. Thank you, and we will be happy to take your questions now.
Hello, could I have my first question?
Okay. Hello, Łukasz. The first question will come from Łukasz Prokopiuk. Please go ahead.
Okay, thank you. Good morning, everyone. I am looking at your corporate segment, and I am looking at your salary costs, and I guess it's connected. We can see a big increase in costs. My question is, could you explain what happened in the first quarter? And could you perhaps explain what do you plan to do to halt the increase in costs? That would be my first question.
I think the salary costs are pretty much as relevant for all the other businesses in Europe and globally as well are clearly impacted by inflation and salary expectations coming from the workforce. And we, as other companies, also follow those expectations to make sure we've got the right competencies and talent on board, and that clearly is an impact. The minimum wage increase is also severely impacting those expectations, and as such shapes our salary cost base. There are some other elements related to changes in the structure that would likely impact the cost base. But all in all, the inflationary environment, the salary expectations, the minimum wage increases drive the majority of the cost base.
I'm sorry, but when I look at the salary costs, yes, in the first quarter, it's a dynamic of 16%-17% in year-on-year comparison. Does it mean that this is the dynamic that more or less we can expect for this year? Cannot anything be done to lower this increase in costs?
On a general note, It is our responsibility to drive the business efficiently, and we obviously make our business decisions related to hiring and salaries with this principle. And as such, obviously, there can be something done, and there is being done, to make sure that our salary base follows the logic of effective, efficient management and hiring decisions. When it comes to the dynamic of the cost in the first quarter compared to the next quarters, let us follow up. But surely, I would expect some flattening related to annualization effects, and also, some hiring decisions and salary decisions take place in the beginning of the year, as typically, and continue through the year.
Okay. But could you also explain what happened in the first quarter in your corporate segment? I mean, well, I presume it's connected with salary costs, but it's... Could you explain and maybe shed some more light on it?
Not only salary increases, but also our donation to a foundation. In the first quarter, we incurred PLN 150 million of donation to ORLEN Foundation.
Oh, excuse me. Just a short comment to the salary cost. One additional factor that was affecting our salary cost increase this quarter versus first quarter of last year was the fact that middle of last year we have changed the salary structure in the group, meaning that we have shifted part of the floating part to the fixed part of the salary, adjusting the structure of the salary to the market conditions, which caused the increase of the salary first quarter.
Okay. Okay, thank you. Can I have another question, maybe?
Yes, please, Łukasz.
Okay. I would like to ask you a hypothetical question. Would you be interested, depending on the offer, in, A, buying Azoty polymer business, B, selling your fertilizer business of Anwil to Azoty, or, C, any other deal with Azoty, given that Azoty is actually your biggest client at the moment, one of your biggest clients?
Łukasz, ORLEN is a public-listed business, and any decisions related to corporate structure, any decisions related to transactions, acquisitions, or disposals, we will need to announce in the formal regulatory manner. That's why I'm not in a position to answer your question today.
Okay, but like, I understand your answer, but is the polymer business, Azoty's Polymer business, a thing which you would be interested in?
Łukasz, it's fair to mention that we already own a minority stake in Azoty's polymer business. You can see that disclosure in our investment in our investment notes in financial- in the financial statements. Clearly there are business synergies between ORLEN Group and Azoty. We are the largest supplier of gas to Azoty. We are partnering on a daily basis, and so, and we see synergies coming from that close cooperation.
I can see your stake, but the thing is, it's a small stake, and I would, like, imagine you either selling it or perhaps obtaining some higher control over it. So that's why I'm asking, anyway.
The moment we take any decisions that would involve our increasing our equity stake or disposing our equity stake, we will inform the market accordingly.
Okay, thank you. I have a few questions, but I will give some space to my colleagues at the moment. Thank you.
Thank you.
Thank you very much, Lucas. We have, Anna Kishmariya in, the queue. Please, Anna, go, go ahead and unmute yourself.
Good day. Hopefully, you can hear me. Thank you very much for the presentation. I have several questions. And starting from the trading segment, if you can provide a bit more color on the good performance there. What level of compensation did you have in the quarter? And also, I assume that the strong performance was related to still favorable terms from last year, which were carried in first quarter. So if you can give some outlook of how the segment will perform late in the year, this would be very much appreciated. And second question would be on the strategy update and CapEx update. If you can... Previously, it was stated already after management change that the strategy review is ongoing, and we can expect some updates later this year. Is it still holds?
Thank you very much.
The trading segment, you asked about compensations. We recognized PLN 2.3 billion of compensations in the first quarter of this year. I will refer to our financial statements, note 5.1, where you can see some more details. When it comes to our CapEx strategy and review going forward, we will comment on that later in the day as well with the CEO statement. However, as already mentioned in the press release, the group is reviewing all the investment projects, and we are having discussions with the new management team, how do we deliver on the strategic objective of the group, which is the energy transition. We expect the exercise to complete through the end of this year, and accordingly, we will organize communication and education in the market.
Thank you. Just one follow-up regarding the outlook for trading segment, going forward, if you can provide any highlights.
Listen, macro environment clearly is less favorable and requires us to take more careful steps, so to say, but we remain positive. We've got well-contracted volumes. We've got good performance for the first quarter, giving us solid foundation for the full year's results, and we remain positive given the challenging market.
Thank you.
Thank you very much, Anna. Now, we have, Krzysztof Kozioł on, on the queue. Krzysztof, please go ahead.
Hello, everyone. Thank you for the presentation. I have three questions, if I may. One would be the follow-up to the Lucas question about the cost in first quarter, the corporate loss. You said that you made some donations to foundation, which amounted to PLN 150. Is it going to occur in the future? And when, I mean, in the first quarter next year? The next question would be kind of hypothetical about your CapEx plans and your CapEx update, especially for 2025.
If you had not taken, like, any decision right now to, like, launch any new investment project for the 2025 and just let the, kind of, let's say, old projects to wind down and to finish, and what would be your CapEx in the 2025, just, you know, based on those old projects or the projects which were kind of initiated by the old management board? And the third question would be about your installation in Anwil, the new installation. Is it, like, working right now, and what's the capacity utilization? Thank you.
All right. Let me start with the first question regarding foundation. I'm not aware, to the best of my knowledge, we do not have any recurring payments plans to our foundation. We are selective when it comes to projects that we support. We're also reviewing our philanthropic policies right now as part of reviewing all the other investment and strategic projects. Therefore, I would rather see regular donations for the foundation. However, the PLN 100 million of the first quarter not being an indicator for the following quarters. When it comes to, I will start with Anwil, and then I'll have a request for one of my team members to take the CapEx question just to simply change the tone here a bit. But Anwil new fertilizers in Anwil have not yet been switched on.
We are finalizing the investment and expect soon kick off of production, but you can't really see the results of the fertilizers unit in the first quarter, and we don't expect any in the second quarter.
In te rms of CapEx, Konrad Włodarczyk speaking, you may assume that if none other projects will appear on the list in the pipeline, you may expect probably a slight increase in CapEx. Please bear in mind that, let's say 30% of the CapEx is dedicated to maintenance, and this is obligatory, that we have to spend to keep all our assets in a good shape. We speed up with big investment CapEx investments like Olefins projects, which should be up and running in the first half of 2027. The second big CapEx spendings will be dedicated to our offshore wind farm on the Baltic Sea, as well as the two CCGT units.
So probably, I would bet that, of course, some of the projects will be ended this year. Majority of those projects will be completed in the refining segment. So for the last year, I would expect, let's say, a similar or slightly higher CapEx.
Thank you.
Thank you very much, Krzysztof. Now let's move to Piotr Dzięciołowski. Piotr, the floor is yours.
Hi, good morning, everybody. It's Piotr Dzięciołowski from Citi. First of all, congratulations on appointment to, to the CFO role. I have a couple of questions from my side. So the first one, what is your impression of the current portfolio of assets? The group was created in a pretty rapid manner of consolidating four-listed company, and as of now, it kind of makes from kind of refining petchem to newspapers, fertilizers, regulated activities, renewables, and I could go on like this. Do you think a breakdown or a disposal of certain assets could be an option to consider for a new management, to really reveal the value that one can see on the sum of the parts basis? So that would be the first question.
And second, more technically, when you look at the reporting structure of ORLEN, there's a couple of things that could be addressed by putting the assets as they fit, so regulated assets could go together, so gas plus power network distribution activities or, you know, you have this ongoing transfer pricing between the upstream to gas segment, which really makes the result as if the ORLEN was only about the gas. Do you think about possible changes of reporting structures, reporting transfer pricing policies that you currently have? And the third question is, can you please update us on the Energa, the listing process, where we are on this? Can you actually make a.
I'm not asking you to comment on the kind of a possible, you know, takeover of the remaining part, but where are you with this legal issue on this entity? Thank you.
Thank you, Piotr, and lovely seeing you again. I will ask my team to prepare an Energa question-answer in the meantime, and I'll take, I'll take your first two questions. Addressing the structure of the group, we are already a multi-energy company, and we have transformed significantly, as we mentioned, over the last few years, adding significant business lines and segments, be it gas trading or gas extraction and upstream activities, or enlarging upstream activities. But all of these are, or form, a solid multi-energy company of a regional reach, which clearly is, for us, a great foundation to grow the business further and transform the industry, transform the energy industry, and deliver on our strategic priorities.
There are obviously, within our group, some other activities that are probably less of a core nature, and these we will be clearly reviewing as part of this strategy review, discussing what adds value to the group or what might potentially be disposed of, and any decisions will be communicated and announced to the market and discussed with you. Reporting is indeed one of the topics on the agenda. And as we are discussing the results and as we are reviewing the composition of our segments, we already have got some ideas that during the strategy review process, we will be scrutinizing and formulating in order to prepare for the new reporting structure. I would rather see this change as more of a cleanup and more...
Making it more readable, making it more usable for the purposes of our discussion with the market. And as part of the strategy review process, we will run some education, assuming we change the reporting structures. But we definitely want to follow the principles of our reporting to be understandable, to be relevant, to be transparent, and that will be our guiding principle preparing any changes in the reporting structure. And when it comes to Energa, Robert will take this one?
Yes.
Go ahead.
I may comment on that. So, from the business perspective, I think that we have a full alignment here, that it's no use to keep the separate holding publicly listed on the stock exchange. Yes, so from the business perspective, it's clear. Of course, from the legal perspective, there are different tools to deliver that... but actually, I would comment that as a part of the strategy update, we'll deliver internally the solutions which we have already in mind. Nonetheless, once it is agreed internally, we will make the information public where it is necessary. But from the business perspective, it is clear that it's no use keeping the separate holding publicly listed going forward.
So, just one clarification on that, guys. Can you please remind us what is the value that you carry this asset on the books, and what is the price you wanted to offer the minorities in the ta- takeover offer? Because I think that's the issue why you have this legal debate, right? And there's a question, like, why wouldn't you pay a close to a book value for the asset on a very good business?
Piotr, would you mind if we follow up with the details?
Sure. Sure, sure. Thank you very much, and good luck in your new role. Thank you. Bye-bye.
Yeah. See you around.
Thank you very much, Piotr. Now let's move to Michał Kozak. Michał, please go ahead with your questions.
Yes. Hi, thank you. I have a couple of questions, if I may. The first one, can you comment on what stage the Czech refinery is in its preparation for processing non-Russian oil?
Czech refinery in Litvinov is the only asset for our group that still can process or is able to process REBCO crude, but that is a result of logistics constraints on the Czech market. Crude can only be effectively delivered to the Czech market through pipeline, and an alternative pipeline connection with the Adriatic Sea is needs to be enhanced and revamped in order to provide for the full throughput needs in Litvinov refinery. That investment is being led by MERO, which is a Czech pipeline operator, and we expect some more visibility on the progress and some more visibility on availability of this pipeline for the purposes of our crude processing towards the end of the year and in the next year.
Yeah. Thank you. The next question: Do you see the possibility of an upward revision of your dividend targets, given the likely lower Olefins investments and the prospect of a good performance in the gas segment this year?
I think it's worth noting that, our current dividend policy already assumes annual to our dividend per share. So since we've got the minimum level of PLN 4.15 this year, it assumes an increase of PLN 0.15 each year going forward as a minimum level of the dividend paid to shareholders. However, as part of our strategy review, we will surely be also discussing our dividend policy. And just to kind of calm everyone down, we completely understand that shareholder returns is our obligation, and we will follow with stable, predictable dividend policy. And if anything, we will review how to enhance and make it more attractive in the future.
Thanks. Would the agreement with LyondellBasell allow, from a legal point of view, ORLEN to invest in polymers with other partner?
I will need some support from the team with this one. Robert, go ahead.
Yeah, well, it is extremely sensitive agreement, so let me comment on that, aggressive scenarios needs to be discussed with LyondellBasell. And actually, this is what we can comment publicly, actually.
Thank you. Thank you. Understand. And the last question: Do you see any risk of fines from the European Commission in relation to undercutting of fuel prices during the election period last year, and in relation to the activities of your Swiss division in the context of Russian fuel trade? Are there any extraordinary inspections in this context? Thank you.
To the best of my knowledge, I'm not aware of any formal proceedings in that context but I'm just looking around the table here.
There are no.
There are none.
Super. Thank you.
Thank you very much, Michał. Now let's move to Tamas Pletser. Tamas, please.
Yes, thank you very much. Good morning. I got only one question or one area of questions, let's say, that's petrochemicals. Basically, you did now almost EBITDA zero in this quarter. Do you consider to shut down some of the low-quality assets in order to boost the profitability of this segment? And also, when I see your CapEx plans, you have this huge investment into Olefins. And looking, you know, the whole petrochemical outlook of Europe with very high energy prices, very high feedstock cost, do you still consider this major project going ahead?
With your second question, was the Olefins project, and I'll put it into a kind of broader context. You rightly pointed out that we barely broke even in the first quarter of 2024. But just, as a reminder to everyone, we have also written off quite a significant share of our petrochemical asset base, in the fourth quarter of last year, and also in the first quarter of this year. It is clearly an indication of the call out for the management board to review all the investment projects in our petrochemical segment, and in particular, the largest project of Olefins. We've got a 4-month audit and review process going on related to the Olefins project. So quantifying any potential scenarios, which includes commercial plans and CapEx plans. We're working with a renowned international advisor on that.
Our teams are heavily involved, and we expect to be ready to provide you with some more detail on that process in the third quarter of this year. When it comes to short-term profitability improvements, we do not have any fixed plans of decommissioning or shutting down any of the units. We are hopeful for the segment to start gradually improving, seeing our efficiency improvements, but also the markets becoming maybe less tougher. I wouldn't say that we expect anything of a favorable, seriously favorable change, but but gradually we hope demand will start improving with the economic re-recovery in Europe.
Okay, that's, that's fair enough. Thank you very much.
Thank you very much. Now let's go back to Łukasz Prokopiuk. Łukasz, you, you wanted to ask additional questions. Please, go ahead.
Thank you for a chance to have some follow-ups. What do you think about Arabian crude oil? Is it cheap, expensive in comparison to other grades? Is it worth it to secure Arabian deliveries in binding long-term contracts, or is it perhaps worth it to buy on spot? What is your view on this topic?
Łukasz, let me take this one in this manner, and to my team, anyone who would like to, contribute, please jump, jump in or chip in. Arabian crude was contracted for processing and provide, provide us with security of supply. And I think that's, that's the, the key message when it comes to a very sudden and major shift of us moving away from REBCO processing to alternative crudes. We indeed process, to, to a great extent, Arabian crude, but also, the North Sea crude, Central, in particular. We, on a regular basis with our monthly operational planning, come up with the best plans of blending those crudes, and adjusting, to the current availability of units in our plants.
Therefore, I find it difficult to comment whether it is cheap or expensive, because that would need a benchmark of this compared to REBCO, that crude is more expensive, but we are unable to process REBCO, due to Russian invasion in Ukraine. Therefore, this discussion is probably less meaningful. But-
But I'm sorry. I'm not trying to compare Arabian crude with RREBCO at the moment, but what I'm saying is that the crude oil market is really big. It's a diversified market. You can buy other grades, and the question is actually regarding other grades. How do you compare Arabian crude oil to, to non-REBCO grades?
Yeah. And, and, and Łukasz, we're actually very active sourcing our crudes. So we do not only process Arabian, we process Central to a large extent, but also a long tail of all the other crudes, blending them to make sure that we've got the best yields and the best throughput results. Therefore, you're absolutely right. It is not only about Arabian, it is not only about the price of Arabian, it's about the optimizing our production plans and making sure that we maximize the variable margins on a monthly basis, which our supply chain management teams are doing together with the production and procurement teams.
If I may add just one comment. For the last couple of years, we have tested and verified, like, 200 different crudes in our refineries. And actually, even a number of years ago, we came to the conclusion that Arabian Light, you know, is a significant part of our economics. And price is only one part of the formula, and it's only, as of today, a small part, because at the end of the day, what is the most important is to get the expected product slate with the expected margins. So actually, you know, based on our experience and actually our knowledge about the market right now, in terms of the crude oil trading, we still confirm that the Arabian Light is a significant part, you know, of our economy.
So this is the logic which we have when we are, you know, programming on a monthly basis our business. Because product slate is one thing, and the utilization of the installations is the second thing. At the end of the day, you have margins, which you have to deliver, and the crude slate is extremely important because our business is based on the mix of crudes. It's not based, it is not based on one crude, actually, yeah? And if you take all of this into account, you get the economics of supply chain management, and this is our logic.
Okay, but it's clear. But I would like to understand, because ORLEN Lietuva has had been testing Arabian crude oil for, I don't know, 10 years ago or even longer, and it's decided to buy on spot. And has the market changed to such an extent that long-term contracts with Saudi Arabia are necessary? I mean, can't you buy it on spot? Is it necessary to sign long-term binding contracts? Can you comment on this?
Łukasz, our business in this respect, in crude sourcing respect, is not only about cost and economics, but also securing proper volumes with proper quality at proper times. Obviously, the most expensive crude is the one you don't have. Therefore, the spot and contract decisions are exactly those decisions. How do you weigh the risk and economics of your decisions?
Okay. How would you compare spot Arabian contracts and your long-term contracts? I mean, is it a similar price? If you would buy Arabian crude oil on spot, is it, maybe it's not possible, I don't know. So how would you compare the two possibilities?
I need to g et some support around the table.
We cannot comment on that. Actually, the pricing is too sensitive.
Yeah, I think it is a commercially sensitive matter, which we won't be able to comment on this call.
Okay, thank you. Last question: What was the EBITDA of LOTOS refining assets in the first quarter, if you may answer, please?
The EBITDA of ex- LOTOS facilities in the refining segment approached PLN 0.6 billion.
Okay. Thank you very much. That's all from my side.
Thank you very much.
Thank you.
Thank you very much, Łukasz. Now we have a question coming from Michał Majewski. Please, go ahead.
Okay, so maybe if there are no questions from Michał, let's move. Let's go back to Piotr Dzięciołowski. Piotr, you also raised a hand. Would you like to ask a question?
Yes. I just have a one follow-up on the windfall profit tax, or so the kind of, you are being taxed on the gas up to PLN 15 billion this year. So if I can you say, like, what is your expectations for next year? Assuming you rationalize the CapEx and the macro on the gas side remains strong, how likely do you think it's possible that we actually extend the windfall profit tax in Poland overall? So we see, your, one of your competitors is essentially capped on the profitability, so whenever they make more, their, kind of, taxation goes up, and so on. So what is your, kind of, thinking around the, the windfall taxation?
Yeah, I think that it's fair to say that this is not really a windfall tax. We'd rather call it a windfall charge, 'cause it's not related to profit. It's simply a charge of an X amount that is being extended to our P&L, and that we need to provide to the state regulators. Going forward, we find it difficult to comment as the regulatory environment is quite challenging, so we've got more and more visibility on some other regulatory changes, be it compensations to end consumers in the electricity sector or gas sector. But when it comes to the windfall charges, I think any other tax going forward, we will comment as we've got some more visibility and decisions of the state regulators.
Understand. Thank you very much.
Ladies and gentlemen, it seems that we have no other persons in the queue except for Michał Majewski and Łukasz Prokopiuk. Gentlemen, would you like to ask a question? If yes, please go ahead.
Yes. Thank you. Maybe one last one, sorry. The PLN 160 million or PLN 50 million donations, which you mentioned in the first quarter, could you please tell us, was this the decision of the- t o pay the donations, was this the decision of the new management board, or perhaps it was some kind of obligation with, from, of the previous management board?
Technically, I'm actually unable to say who made the decision, but I think in this case, it's not that relevant, because it's part of our, a kind of statutory obligation to ORLEN Foundation, and then ORLEN Foundation makes distributions of that amount to a set selectively on a carefully selected project.
Okay. Okay, thank you. That's all from my side.
Thank you.
Okay. Ladies and gentlemen, if you would like to ask a question, please go ahead. It seems that there are no further questions, so let us move to the conclusion.
Well, if there are no further questions, thank you very much for participations and all of the questions. I hope we, let's say, answered, let's say, majority of them, and you are satisfied with our answers. So thank you very much for attending, and have a nice day.
Thank you, everyone. Have a lovely day.