Good morning, ladies and gentlemen. Welcome to the conference call regarding Q4 consolidated financial results of ORLEN Group. My name is Konrad Włodarczyk, I'm Head of Investor Relations, and I will moderate this call. The presentation will be delivered by Michał Perlik, Executive Director for Finance Management, and Marcin Piechota, Deputy IR Director. After the presentation, we will open a Q&A session. The whole meeting will be recorded, and the recording, as usual, will be available on the first page. During the presentation, your microphones will be switched off. Before we start the presentation, I would like to give floor to our CEO, Mr. Witold Literacki, for a short introduction. Please, go ahead.
All right, let's start. Good morning, ladies and gentlemen. Before we move on to the discussion performance of ORLEN Group in Q4, I would like to introduce myself and give you an overview of ORLEN Group structure, strategic directions in a broader context. As you know, we are in the process of selecting a new management board throughout a competitive recruitment procedure. The supervisory board has appointed me to act as CEO and President of ORLEN's Management Board until the completion of recruitment procedure. I came back to ORLEN after a few years absence. From 2008- 2020, I was working in ORLEN as Head of Tax Office, so I had the possibility to familiarize with the company, which of course has significantly grown and changed.
The experience we've gathered in previous years lets me identify challenges that currently ORLEN is facing. One of these challenges is to build the value of the ORLEN Group, and our primary focus will be on achieving this goal, operating strictly as a business entity. I would like to share a few observations that we, as a new management and supervisory board, have after our initial weeks of-
Can begin.
Firstly, we want ORLEN Group to focus, to focus more on its key business projects. My ambition for ORLEN Group is its current shape. It is to fully realize the potential that has been created throughout the mergers. Very important to me, successful implementation of energy transitions projects. We already have nearly 1 gigawatt renewables capacity. In this area, the group will grow throughout both investment and new acquisitions. In Europe, the game is not only about leading the energy transitions, but most importantly, ensuring the cost effectiveness and security of energy supply. Renewables will be crucial to the future of our economies. Secondly, we will focus on ORLEN Group financial discipline. Planned CapEx for this year is more than PLN 38 billion, of which nearly PLN 28 billion will be allocated to growth projects.
The largest portion of CapEx will be spent for projects in Upstream, Petrochemical, and Energy segment. Our task is to execute these plans in the most efficient way and accordingly to the highest standards. We must ensure that every zloty is spent in the best possible way. Hence, it will be vital to choose projects that have the highest return and offer the most promising projects for our shareholders. I would like to underline to our shareholders. Thirdly, we want ORLEN Group to be seen as a safe investment in the tough times, what is very important. We know how important is predictability to our shareholders, and we are fully aware of energy transitions projects, importance for building the group's value in the long term. Our objective is, therefore, to establish conditions for the uninterrupted implementation of growth projects.
At the same time, given the unstable geopolitical situation, we will be enhancing our own security by such means as developing our own hydrocarbon productions in politically stable regions of the world. As the management board, we believe that building an attractive portfolio of strategic projects and allocating capital in initiatives that generate the greatest value in the most effective approach to building the value of ORLEN Group. Thank you very much. I give floor to Konrad.
Thank you. Let's kick off with the facts and figures. Slide number three. In Q4, we achieved over PLN 98 billion of revenues. EBITDA LIFO amounted to PLN 11.2 billion for this quarter. We generated PLN 6.1 billion cash flow from operations, and we spent PLN 32.4 billion CapEx in the whole year. In Q4, ORLEN consistently implemented strategic transformation projects that, of course, build the company value in the long term. Mm, the final investment decision regarding the Baltic Power offshore wind farm that was made after obtaining financing in the formula of project finance was the major milestone in this project. The investment is also accompanied by construction of the Baltic Power Service base in Łeba, at the seaside.
As a part of the development of renewable onshore energy, ORLEN concluded a conditional agreement for the purchase of additional wind farms with a total capacity of 60 MW located in Greater Poland and Western Pomerania. As a part of construction of new transformation businesses, ORLEN signed an agreement with Horisont Energi on a potential cooperation on one of the most advanced CO2 storage projects on the Norwegian Shelf. A cooperation agreement with Yokogawa Europe was also signed regarding the development of an integrated system for the production of synthetic fuels, which are an opportunity definitely to achieve emission neutrality by the aviation sector in Poland. Part of the development of biofuels, so UCO hydroformer installation was launched in Szczecin for the production of second-generation biocomponents from used cooking oil.
The pro-ecological investment is a part of ORLEN Group's strategy in the area of biofuels, enabling the replacement of fossil fuels with fuels made from waste raw materials. Esters produced in this installation have 83% lower emission compared to the traditional diesel. ORLEN also started testing the company's first publicly available hydrogen station in Poland, in Poznań, and the first hydrogen locomotive joined ORLEN railway fleet. In Retail segment, the most important was a consent of European Commission, enabling to acquire 267 fuel stations in Austria, so as a part of the unification of European brands, ORLEN. Rebranding was also completed in 90 stations in Slovakia, and the next stage of rebranding was also initiated on the German market, under which, by the end of 2023, there were 100 fuel stations already operating.
As a part of development of Processing and Upstream business, the construction of a strategic investment in the first nitrogen fertilizers production line was finalized, and PGNiG Upstream Norway started production from the Tommeliten Alpha field . This will provide ORLEN with an additional 5 BCM of natural gas annually, which will be delivered to Poland via the Baltic Pipe. ORLEN also started the process of taking control of the transit gas pipeline system, increasing the country's energy security. The largest investment in domestic gas storage facilities was also launched through the expansion of underground gas storage facility in Wierzchowice, as well as reserve regasification capacities in the floating gas terminal planned for 2028 in the Bay of Gdańsk. Two modern LNG carriers have already joined ORLEN fleet.
ORLEN signed a contract for a construction of a modern oil compressor station in Kętrzyn, which will process 500,000 tons of resid and produce 200,000 tons of oil annually for the production of low-emission biofuels. Additional agreement was also signed for the purchase of shares in Energop, a pipeline manufacturer, among others, for the refining and petrochemical sector. The transaction will increase the potential of ORLEN Group and the implementation of industrial investments, in which technologically advanced pipelines are very important element. I will now move on to the section regarding market environment. So slide number five. Macro in Q4 was still very volatile, I may say so. So model refining margin decreased quarter-on-quarter due to negative impact of lower diesel, gasoline, and HSFO cracks, as well as higher gas prices.
Diesel cracks decreased by 11% quarter-on-quarter, mainly due to higher supply as a result of completion of maintenance shutdowns in Europe and higher operating capacity of refineries in Middle East regions, decline in demand in Europe and India, as well as inventories higher in ARA and U.S. Gasoline cracks decreased by almost 40% quarter-on-quarter, mainly due to lower seasonal demand, so that was the end of the driving season, and lower export from Europe to the U.S. and Africa. Differential decreased to minus one US dollar... decreased by circa $1 per bbl quarter-on-quarter, to the level of minus $2 per bbl.
So, this is the premium versus blend due to the reduction of Urals throughput in ORLEN Group below 10%, and of course, replacing this with more expensive grades, as well as there was a lower Urals differential by 13% quarter-on-quarter. In petchem, macro still remains tough. Means low demand for petrochemical products from Europe due to economic slowdown and lack of competitiveness. However, in Q4, we observed an improvement in margins quarter-on-quarter, resulting mainly from cheaper feeds of both naphtha and LSVGO due to lower crude oil prices.
Brent crude oil price decreased in Q4 by 3% quarter-on-quarter, while natural gas prices increased by 15% quarter-on-quarter on the Polish Power Exchange, as well as TTF prices were higher by more than 25% quarter-on-quarter, mainly due to seasonality and one of limiting gas supply on the market, like, for example, strikes at LNG terminals in Australia, or the closure of the largest gas field in Europe, Groningen field, in Netherlands. PLN quarter-on-quarter did not have a major impact on operational results. So let's move to slide number six, data regarding GDP and fuel consumption. In Q4, comparing to the previous year, there were signs of economic recovery in Poland, Slovakia, and Hungary.
GDP increase in Poland and Hungary translated into higher fuel consumption in these countries by 7% and 8%, respectively, and slight decreases in consumption on other markets. In the coming quarters, we expect economic recovery in Poland and increase in fuel consumption. Let's move to slide number eight, ORLEN Group financial results. In Q4, as I've mentioned at the beginning, we recorded over PLN 98 billion of revenues due to lower sales volumes and lower refining, petchem, and hydrocarbon pro- quotations. Yearly revenues amounted to PLN 373 billion, so this is the highest historical level. EBITDA LIFO amounted to PLN 11.2 billion, and was lower by PLN 5 billion compared to the previous year.
That was mainly due to negative impact of lower refining margins and lower differential, lower petrochemical margins, lower margins in upstream, lower volumes effect, lower trade margins, and strengthening of Polish złoty, but also valuation of CO2 contracts, higher variable costs in retail, higher labor costs, and lower results in Lotos Group and Baltic Power. Those negative effects were limited by positive impact of PGNiG Group results, higher fuel and non-fuel margins in retail, hedging, usage of historical inventory layers, lower provision for CO2 emissions, and provision reversal on inventories, so as we call it, net realizable value. Negative impact of changes in crude oil prices on inventory valuation in Q4 amounted PLN 0.6 billion . So this decreased reported EBITDA to the level 10.5 billion.
Financials below EBITDA in Q4 amounted to PLN 1 billion, mainly as a result of positive impact of net FX differences. Net profit in Q4 amounted to PLN 7.3 billion, and, cumulatively for 12 months of last year, PLN 27.6 billion. Slide number nine, EBITDA LIFO split by segment. So here we see that, results were mainly generated by the Gas segment, truly saying, in terms of refining, PLN 0.6 billion, decreased by almost PLN 10 billion year-on-year, mainly due to negative macro impact, lower sales volumes, lower result of LOTOS Group, lower trade margins, higher fixed and labor costs, and positive, impact of, historical inventory layers and provision, reversal on inventories of net realizable value.
Petchem lost PLN 0.3 billion, decreased by PLN 0.9 billion year-on-year, due to negative macro impact, lower sales volumes, lower trade margins, and higher fixed and labor costs. Energy loss PLN -0.8 billion, decreased by PLN -0.9 billion due to negative impact of macro, payments to the Price Difference Payment Fund, and lower results of Baltic Power, and positive impact of higher sales volumes, higher results of PGNiG due to full consolidation. So please bear in mind that we have a discrepancy comparing reporting periods. So in Q4 2022, PGNiG Group results were consolidated from November, so it was consolidated only for two months. In retail, PLN 600 million, comparable results year-on-year.
On one hand, we have a positive impact of higher fuel and non-fuel margins, as well as higher sales volumes. On the other hand, we have negative impact of higher cost of running fuel stations. Upstream, PLN 0.6 billion, so decreased by PLN 5.7 billion year-on-year due to negative macro impact, lower sales volumes, payments to the price difference payment fund, and higher labor costs. Gas, our shining star, PLN 11 billion, higher by PLN 12.5 billion year-on-year, as a result of positive impact of lower gas procurement costs, receives compensation by PGNiG Obrót Detaliczny from the price difference payment fund and higher results of PGNiG Group due to full consolidation effect.
Corporate functions, PLN -0.5 billion, so higher cost by 0.1 due to increase in the scale of ORLEN Group operations. So now let's move to the details of each segment. Slide number 10. We start as usual from the Refining. In Q4, EBITDA LIFO in the Refining segment was PLN 4.6 billion, so a lower result, as I mentioned, by almost PLN 10 billion year-on-year. We see on the graph that there was a negative impact of macro factors at the level of PLN 2.4 billion, as effect of lower margins on light distillates, middle distillates. We had a lower differential resulting from the changes in the structure of processed crude oils.
We had a strengthening of Polish zloty versus U.S. dollar, and we had negative impact of CO2 emission valuation contracts. Those effects were limited by higher margins on heavy fuel oil, hedging effects, lower cost of internal usage as a result of lower crude oil prices, and lower CO2 provisions. Negative volume effect, the level at the range of PLN 2.5 billion. This results from lower sales volumes by 10% year-on-year. Sales of all refining products were lower, except jet fuel, which increased by 14% year-on-year. We see that sales declines were recorded in all of the markets, so in Poland, Czech, and Lithuania.
Additionally, the change in the structure of processed crude oil, so reduction of REBCO that was replaced by more expensive grades, had a negative impact on the volume effect. In terms of other factors, a big element, almost PLN -5 billion, year-on-year. So here we have a lower result of LOTOS Group. We have lower trading margins, year-on-year, increasing overheads and labor costs, partially offset by positive usage of historical inventory layers and inventory write-down. Then, Refining segment operational data. So throughput in Q4 amounted to 9.5 million tons.
That was 88% utilization, so it means that the throughput was lower by 1.8 billion, 1.8 million tons year-on-year, mainly as a result of consolidation of 70% of throughput of Gdańsk refinery in Q4 versus consolidation of 100% throughput in Q4 2022. So this is very, very important when you comparable results year-on-year. In terms of Płock, throughput was lower by 0.3 million tons, resulting from shutdowns of hydrocracking unit and olefin unit. Throughput in Gdańsk lower by 1 million tons, as I've mentioned, due to different consolidation. So we consolidated in Q4 2023 just 70% of the production because just to remind you from the beginning of this year, 30% of the Gdańsk refinery was sold to Saudi Aramco.
Crude oil throughput in both ORLEN Unipetrol decreased by 0.2 million tons per year. In terms of fuel yields, we have increased by 5% in domestic refineries and in Lithuania and Czechia, the fuel yield was at comparable level year-on-year. Sales of refining products decreased by 10% to the level of 8.7 million tons. Let's move to the petrochemical division. Petchem recorded loss at the level of PLN 0.3 billion, which was lower result by PLN 0.9 billion compared to the previous year. Macro effect, lower by PLN 0.2 billion. That was mainly the result of lower petrochemical margins and negative impact of valuation of CO2 contracts. On the other hand, we had positive impact of stronger euro versus U.S. dollar.
In terms of volumes, negative effect, PLN 0.4 billion, as a result of decrease in sales by 14% year-on-year. We recorded lower sales of olefins, PVC, PTA, with higher sales of fertilizers and stable sales of polyolefins. Sales decreased in Poland and the Czechia by 16% and 10% respectively, with increase in Lithuania by 9%. Other factors visible on the graph, PLN -300 million, ... a lot of, so this include lower trading margins, higher overheads and labor costs, and negative impact of settlements of CO2 allowances, which was slightly, let's say, offset by positive impact of usage of historical inventory layers. Slide number 13, operational data of Petchem segment.
So you see in the table, that was the lower utilization of majority of petrochemical installations, in Q4, comparing year-on-year. That was the result of maintenance shutdowns, but also the adjustment to the weak macro environment. Higher utilization was recorded only in Anwil, so fertilizers unit by 34 percentage points year- on- year, and in olefin installation in Czechia by 4 percentage points. Sales volumes in Q4 decreased by 14% to 4.98 million tons. We recorded lower sales of olefins by 41%, PVC by 35%, PTA -15%, and higher sales of fertilizer by 30%, and stable sales of polyolefins. As for now, that's all from my side. Now, I will let Marcin to describe other segment. Please go ahead.
Thank you. Moving to Energy. In Q4, we recorded a negative EBITDA of minus 0.8 billion PLN, mainly due to worsening of micro environment, warm-ups affecting results of ENERGA Group, and negative contribution of Baltic Power. The impact of the micro environment year-on-year was negative, mainly as a result of transactions hedging electricity prices in ENERGA Group and ORLEN. Additionally, higher costs of network losses, with a positive effect of the change in reserves year-on-year for onerous contract and sales branch were recorded. Positive volumes effect results from higher production and sales of electricity generation in CCGT Płock and in PGNiG TERMIKA, were partially limited by higher consumption of natural gas. Lower sales of electricity in the ENERGA Group generated a favorable effect, resulting from lower coal consumption.
PGNiG Group had a positive impact on segment's results of PLN 0.9 billion year-on-year, due to increase in average heat sales price and higher volumes of generated electricity. Negative impact on segment's results, among others, had higher fixed and labor costs, write-offs to the price difference payment fund, higher costs of transmission and transit fees, and consolidation of Baltic Power's results of PLN 0.6 billion. In Q4, ORLEN Group produced 5.3 TWh of electricity, out of which over 60% came from renewables and low-emission gas-fired units. Electricity production increased by 36% year-on-year, due to higher generation from renewables of ENERGA Group and cogeneration units of TERMIKA Group, as well as contribution of newly acquired wind farms by ORLEN Group.
Sales of electricity maintained in similar levels because of higher volumes traded by ENERGA Group and ORLEN Energia, while distribution of electricity increased by 2% year-over-year due to higher use in the majority of tariff groups. Heat sales increased 11% year-over-year, despite higher temperatures by 0.5 degrees Celsius, due to consolidation of PGNiG TERMIKA assets in the whole quarter versus two months of 2022. Moving on to retail, we generated in Q4 an EBITDA of PLN 633 million, and maintained comparable levels year-over-year. Higher fuel and non-fuel margins, as well as higher sales volumes year-over-year, had a positive impact on results. Fuel margins increased in Germany and Czechia, however, we recorded lower margins on the Polish market. Non-fuel margins were higher in Poland and Germany, while were lower in Czechia.
Overall sales volumes increased by 21% year-on-year, with gains in all fuel types. Sales increased in all markets except Lithuania. The above-mentioned effects were limited by a negative impact of higher operating costs of fuel stations due to inflation and 73 new locations year-on-year. The number of fuel stations at the end of Q4 2023 was 3,170, so increase mainly driven by German market, due to launch of self-service fuel stations acquired from OMV, and in Slovakia, resulting from acquisition of fuel stations from MOL, and the launch of rebranded self-service fuel stations acquired from the local network. Moreover, in Q1 2024, ORLEN finalized purchase of Doppler Energie, the company managing 267 fuel stations in Austria. As a result, ORLEN will be among the three largest fuel chains in this country, with a 10% share in the retail market....
Market share increased in Czechia, Poland, and Slovakia, with stable year-on-year share in Germany, Lithuania, and Hungary. Number of non-fuel locations increased by 146 year-on-year to 2,605. During the year, number of alternative fuel points increased by 97 and reached 734. Currently, we are the owner of 660 electric car charging stations, 71 CNG, and three hydrogen stations. The number of ORLEN Paczka locations amounted to more than 10,500. Moving on to Upstream. Upstream segment posted an EBITDA of PLN 578 million, which was lower by PLN -5.7 billion compared to Q4 2022. This is a fallout of significant decrease in hydrocarbon prices. TTF gas price was lower by 67% year-on-year, Polish Power Exchange by 58% year-on-year.
Meanwhile, crude oil price also dropped by -6% year-on-year. Moreover, the segment's results were negatively affected by write-down of the price difference payment fund in the amount of PLN -3.4 billion in Q4 2023. Write-down for the entire 2023 reached PLN 13 billion . The average production of hydrocarbons in ORLEN Group decreased in Q4 by 6,900 BOEs a day. Gas production was lower by 500 BOEs a day. Oil and NGL was higher by 1,600 BOEs a day. Lower prices of hydrocarbons had an impact on a weaker PGNiG Group's results. Compared to Q3 2023, production of hydrocarbons increased by 29,400 BOEs a day. The strongest increase quarter-on-quarter were recorded in Norway and Poland. It was related mainly to restart of production after maintenance works.
Moreover, in Q4 2023, in Norwegian Continental Shelf, we started production from Tommeliten Alpha field. Total 2P reserves amounted to almost 1.3 billion BOEs at the end of 2023, where natural gas accounts for 75%, while oil and NGLs, 25%. Average gas and oil production amounted to 184, 30 BOEs a day. In Poland, it was 80,000 BOEs a day. In Norway, 82,000 BOEs a day. In Canada, it was 16,000 B OEs a day. Natural gas accounts for 72%, while oil and NGLs to 28% of Q4 production structure. In Q4 2023, Gas segment generated an EBITDA of PLN 11 billion, out of which PLN 10.2 billion was generated by trading and PLN 0.8 billion by distribution. Retail tariff was on the level of PLN 570 per MWh until November 20th.
Following decision of the President of Energy Regulatory Office, retail tariff price was lower, but to the level of PLN 484 per MWh until the end of 2023, and afterwards, since January 1, 2024, to PLN 318 per MWh. Average gas prices for SMEs within gas for business pricing scheme was around PLN 201 per MWh until the end of November. In December, as a result of growing prices on the global markets, it increased to the level of PLN 263. Significant impact on segment's results had lower cost of gas due to falling prices on the spot market and in monthly contracts. Compared to Q4 2022, TTF month ahead price declined by 67% year-on-year.
Average price of all transactions in Polish Power Exchange, including spots and contracts, was PLN 309 per MWh, which is 21% lower year-on-year. Meanwhile, average price of natural gas transferred from Upstream to the Gas division was PLN 195 per MWh. In Q4, PGNiG Obrót Detaliczny received compensations from price difference payment fund in the amount of PLN 5.4 billion. In the entire 2023, compensations amounted to PLN 17.4 billion. ORLEN Group generated a EBITDA of PLN 0.8 billion from distribution services, which is around 25% lower year-on-year, mainly as a result of lower results from system balancing.
Total gas sales outside ORLEN Group increased by 3% year-on-year, mainly due to higher seasonal demand for power and heat generation, as well as slow growth of gas demand within the biggest ORLEN Group's customers from other industries. Sales volumes of PGNiG Obrót Detaliczny dropped by -3% year-on-year, among others, due to higher temperatures in the quarter and hence lower gas consumption for heating.
Gas inputs to Poland and amounted to 42.1 TWh, of which 47% was LNG. Execution prices of sales contracts have maintained at a relatively high level comparing to spot market prices, which was a favorable factor for segment's results. Gas distribution volume in Q4 amounted to 38.5 TWh, and was higher by 6% year-on-year, despite average temperature in the quarter higher by 0.5 degrees Celsius. At the end of December 2023, overall level of stored gas in Poland reached 98%, 95%. Thank you, and now let's move to cash flow and indebtedness, which will be described by Michał Perlik. Michał, please.
Thank you, Marcin. Good morning, everyone. Starting from cash flow slide, another solid year in terms of cash flow generation. We recorded PLN 6.1 billion of net inflow from operations in 4Q 2023. It would be even higher, if not one of negative effects on the working capital increase, related mainly to delay in payments of compensations from the compensation funds to our gas distribution component in the amount of around PLN 4 billion . The payments has been already paid in the first quarter of this year. EBITDA was very positively contributing to net inflow from operations, with PLN 11.2 billion, negatively also, by PLN 0.6 billion of LIFO effect.
Slightly negative impact of combined settlement of deposits on derivatives and impact of derivatives. So we were almost able to cover the whole net outflow from investment by inflow from operations. Outflow from investments was PLN -7.5 billion in fourth quarter. Over the whole year, 2023, we were able to slightly decrease the net debt by almost PLN 4 billion, mainly thanks to very solid EBITDA results of PLN 44 billion, and the decrease of working capital over the whole twelve months by PLN 9 billion. Thanks to this, we were able to finance the whole CapEx, the whole investment program of PLN 32.4 billion. We paid a historically high dividend of PLN 6.4 billion.
Income tax, also historically high of PLN 16.6 billion and on the top of that, we purchased CO2 allowances and property rights of value of almost PLN 10 billion. So moving to the next slide, we can see that we finished the last year with very minor debt, net debt of PLN 1.8 billion, with marginal figure, really, behind the current scale of operation of ORLEN Group. So we are at the level of around zero with net covenant. I would just like to recall that our strategic maximum level is 2.5, and bank covenant facility agreement level is 3.5. So we have, say, plenty of space, and very solid, very comfortable liquidity position at the moment.
No substantial changes in terms of structure of financing, of funding, structure. Also, no changes in terms of ratings. We still keep the highest historical ratings, both from Moody's and Fitch. That's all from my side, and I hand back over to Konrad. Thank you so much.
Thank you. So now let's move to the CapEx. CapEx in last year, so 2023. CapEx in 2023 amounted PLN 32.4 billion, of which almost 80% was spent on development projects. You've got the detailed list of projects, segment- by- segment, presented on the slide. Compared to the plan, the CapEx was lower by almost PLN 3 billion. This comes from some savings, postponements of the deadlines, and the partial postponement of works in terms of maintenance, shutdowns, and the spare parts. We had also some delay from GE, resulting on the lack of commissioning of planned section of the construction of CCGT Ostrołęka.
We also recorded, let's say, exchange rate differences on the investment in Norway, so the difference between what we were planning according to Norwegian krone versus Polish złoty. So now, let's move to slide number six. So I think, that, let's say, the year, the end of the year is a good time, to summarize the synergies effect achieved, so far from the merger, of ORLEN with LOTOS Group and PGNiG Group. This is completely, new slide that was, created, for, for this purpose. We would like to show you that, till the end of Q4, we have already, squeezed 1.5 billion synergies, including, positive impact on EBITDA at the level of PLN 500 million and PLN 1 billion as other financial effects.
Additional EBITDA was generated in logistics, supply chain management, and there was a cost optimization. In terms of financial effects, which include savings on working capital, savings on financial costs, and other financial effects, that was achieved in upstream abroad, oil and gas trade, IT, and purchases. Implementation of this budget, because maybe it's worth to mention how we calculate this effect. Yeah, so the... Let's say, the PMI, so post-merger integration, is calculated as the sum of the impact on the EBITDA and the impact on other financial effects, adjusted by the implementation budgets of the CapEx and the OpEx required to implement those projects, and the implementation budget for already realized synergies was at the level of PLN 50 million.
What's very important is the long-term perspective. So we estimate more than PLN 20 billion net financial effect of synergies in the coming 10 years horizon, so the years 2023, 2032, of which more than a half of the synergies will be realized in finance management, logistics, supply chain management, and development. So now let's move to slide number 28. Again, CapEx, but now for this year, so 2024. Planned CapEx is at the level of PLN 38.6 billion. This is over PLN 6 billion more than the last year. We plan to spend over 70% of this amount on growth projects that is, that are shown on this slide.
We plan to invest the most money in Upstream, PLN 7 billion, Petchem, PLN 6.2 billion, and in Energy segment, PLN 5.7 billion. Main investment, as you see on the map, will be realized in Poland, so around 74% of spendings, and in Norway, 40% of spending. So these are our directions. Increase in development spendings will be visible if we are talking about the comparison year-on-year, mainly in Upstream segment, so this reflects the production from fields in Norway, Tommeliten Alpha , Fenris, and Yggdrasil, as well as in Petchem segment, which is a result from higher spendings on Olefin project in Płock, comparing to 2023. Now, let's move to slide number 29, current macro environment.
Brent crude oil price, lower 4% quarter-on-quarter, mainly as a result of fears on a global economic recession and increased oil production in U.S. and Angola. Angola, I don't know if you are aware, just decided to leave the OPEC to increase the production. In terms of model refining margin, we record higher level, 6% quarter-on-quarter, mainly due to positive impact of higher cracks on gasoline and HSFO and lower gas prices, as negative impact of lower cracks on diesel.
However, recently, what we observed is a strong increase in cracks on both diesel and the gasoline, so this is the result of lower fuel imports to Europe as disruption in shipping in the Red Sea and higher transport costs, as well as a result of refinery maintenance shutdowns in Europe and U.S. Differential increased by $0.8 per bbl, quarter-over-quarter, to the level of -$1.2 per bbl. So this is the result of lower premium for Arabian Light crude oil and a higher view differential comparing quarter-over-quarter. Crack margins on petrochemical products are lower quarter-over-quarter. Natural gas price on TTF and PPX market drops in Q1 by 20%-30%.
Mainly due to higher flows from Norwegian Continental Shelves and also expected increase of LNG regasification capacity in Europe, I mean, Greece and Germany. Gas storage facilities in the EU are filled at almost 70% of capacity. Let's move to slide number 30, the last slide in our presentation, so market outlook for this year. In 2024, we expect average Brent crude oil price at the level of $82 per bbl. So this is a comparable level year-on-year. So, growth in the production outside OPEC will continue to surpass increase in global demand for oil. Of course, OPEC has instruments to keep oil prices above $80 per bbl, so probably we may expect reduce of oil production.
In terms of refining margin, we are expecting $12 per bbl as a yearly average, so lower margin year-on-year. This is the result. First of all, quite high base from 2023. Please bear in mind that the margins in 2023 achieved as a yearly level of $17 per bbl. And secondly, this is the result of plant commissioning of new capacities, refining capacities, worldwide. I'm talking about in Nigeria and Mexico. In terms of differential, we are expecting a premium at the level of $0.6 per bbl. Petrochemical margins should improve slightly. However, the first improvement probably will be observed in the second half of the year.
In terms of gas prices and electricity prices, we are expecting lower gas prices to approximately EUR 170/MWh. In terms of electricity prices, EUR 450/MWh. On a full-year basis, comparing year-on-year, we expect increase in fuel sales in Poland, that I mentioned at the beginning, as a result of forecasted improvement in the macro situation, with lower fuel sales on other markets. We assume increase in gas consumption year-on-year, due to lower prices of commodity and increased demand from industry. And we also forecast stabilization of domestic electricity consumption comparing year-on-year. In the regulatory environment, what's important to underline definitely is gas right down to the price difference payment fund.
This is in the area of natural gas extraction in Poland, PLN -16.5 billion. This will be a negative impact on our Upstream segment. It will be split equally in six installments, so it will be paid in the first half of 2024. On the other hand, we have a compensation in the area of gas sales and the distribution in Poland. This results from setting the maximum price below the tariff, which will have a positive impact on Gas segment results at the level of up to PLN 5 billion. Higher national index targets, so it means higher costs due to increase in ratio. However, we still are under reduced ratio because we fulfill all the necessary requirements.
So instead of 9.1%, reduced ratio for ORLEN is 6.6%. And from the beginning of this year, probably most of you recorded the change on the fuel station. So we implement a gasoline with a higher bioethanol content, so gasoline E10. So this is available on the fuel stations in Poland from the beginning of the year. So that's all from my side. Thank you very much for the patience and attention, and please feel free to ask questions.
Ladies and gentlemen, to ask a question, please raise your hands and join the queue. To raise a hand on the telephone, please press star five on your telephone keypad. We have already a couple of people raising hands, so we'll move to Krzysztof Kozieł. Krzysztof, please, ask a question and unmute yourself.
Hello, everyone, Krzysztof Kozieł speaking, Pekao SA. I have a few questions, if I may. The first question is about that working capital build-up in the fourth quarter. Could you please say again, where did that come from? And, is it going to be fully reversed in the first quarter? And how about the other parts of working capital as well in the first quarter? What would you expect the working capital change would be in first quarter? And the second question is about your CapEx plans. Of those PLN 39 billion that you said on the presentation that you're going to spend this year, how much of that is already committed?
And are there any moving parts that, you know, the, the new Board that is going to be appointed soon, c an change after revising that, those plans? And, specifically on the Upstream CapEx, you said in the presentation that you're going to spend PLN 7 billion. Does that number include any M&A spending, or is this purely organic? And, third question, if I may, capacity utilization ratio in refineries, in the first quarter of 2024, do you plan any maintenance and stoppages as well in the first quarter? And, yeah, maybe that's it for the moment being. Thanks.
Okay. Konrad Włodarczyk speaking. So maybe I will take the questions about the CapEx and capacity utilization ratio in the Refining. So in terms of CapEx plans for 2024, yes, I confirmed almost PLN 39 billion. This is the CapEx that we have budgeted for this year, so I assume that this CapEx is already committed to be spent this year. Of course, we will have a new management board soon, so probably the new management board will carefully go through all the projects and take the decision if there is a business rationale to continue them or not. However, CapEx for this year, I may say PLN 39 billion, is fully committed. This CapEx does not include any M&A.
Yeah, so this is our usual approach. We do not include any M&A in our CapEx forecast. So you asked about the Upstream CapEx. So PLN 7 billion is just reflecting the production from the fields in Norway, so Tommeliten, Alf, as I've mentioned, Fenris, and Yggdrasil area. In terms of capacity utilization, so if you look on 2024, generally, I would say that the throughput will be on the similar level as we had in 2023. So roughly speaking, 90% of utilization ratio. We will have a higher throughput in Płock, mainly due to the fact that we will have a lower scope of maintenance shutdowns comparing year-on-year. We will have a comparable throughput in Gdańsk. There are no major shutdowns of units.
At lower throughput in ORLEN Lietuva, so there is still quite low demand for fuels, but there are no, let's say, significant maintenance shutdown. So the, let's say, the throughput will be adjusted to the fuel demand, I may say so. And in terms of ORLEN Unipetrol, there will be a cyclical maintenance shutdown of a refinery in Litvínov. So some of those projects will start in Q1. So if we are talking about Q1 in itself, we are expecting to process 9.5 million tons of crude oil, so 90% utilization ratio, comparable quarter-on-quarter. In Płock, the utilization ratio will be slightly above 90%. So we will have maintenance shutdowns on the refining side. I mean, H-Oil, which is still out of order after the maintenance shutdowns.
HDS, two or three weeks, and CCGT Płock, one week. We have also some maintenance shutdowns on the petrochemical side, so PTA will be out of order for one week. In terms of Gdańsk, as I said, no major maintenance shutdown, so we will run in full capacity, 1.8 million tons. In terms of Unipetrol and ORLEN Lietuva, you may assume that capacity utilization will be at the level of 80%. In Unipetrol, we have a maintenance shutdown of hydrocracking, 12 weeks, visbreaking, three weeks, CDU, and reforming for two weeks. I n terms of ORLEN Lietuva, vacuum flasher and visbreaking will be out of order for two weeks. So just to summarize, in Q1, you should expect, let's say, comparable throughput, quarter-on-quarter, 9.5 million tons. Now I will give the floor to Michał to elaborate about the working capital build.
Okay. Thank you, Konrad, and thank you for the question about working capital. Yes, your understanding is correct. We have a distortion in working capital in Q4. The distortion is related to payment, actually lack of payments, from the compensation fund, which is, as you probably remember, aimed to cover the fixed price for sales of electricity and gas. In our cases, predominantly gas compensations, what we are talking here about. This lack of payment is around PLN 4 billion. So what we should get last year and what was the payment was postponed till first quarter of this year. So it has negatively affected the receivables, which you can see we have a substantial increase over the last quarter.
You can see it in the cash flow statement, in the financial statement. Yes, we have already received the compensations, meaning that the position has been reversed, and it has a now positive impact on the cash flow.
Okay, thank you.
. Thank you very much for the questions. Next, we'll move to Łukasz Prokopiuk. Łukasz, please, ask a question.
Hello. Thank you. I have a question on the revaluation of own-use contracts at the amount of PLN 2.5 billion, and could you explain why you treat this as a one-off? And can you confirm that it was booked as hedging? That's the first question.
Yeah. So would you like me to start with answering this question?
Yeah. Let's go one by one, we may.
Starting from the last part of your question, it's not a hedging activity. It's an accounting, I would say, activity or adjustment, properly speaking. As you know, following the merger with Lotos and then with PGNiG, we were obliged to perform a PPA exercise, which is purchase price allocation, meaning that we are obliged by the international standards to revalue all the assets and receivables to fair value. PGNiG had massive open position on their own-use contracts, mainly for the sales and purchase of gas on the power purchase exchange.
You remember that, when we were purchasing or taking over PGNiG, it was during the period of high volatility of the gas prices, meaning that the contracts that I'm talking about, they were either, you know, deeply in the money or out of the money, for the moment of the merger. Meaning that we were obliged to adjust the book value of the contract to the fair value, and it was influencing the result on the PPA recalculation in which it was reflected in the results of 2022.
Then following in the following quarters, we are recognizing this effect on the settlement of the specific contracts, either in the income, on, in the income, or in the cost of goods sold, depending whether it's it's a positive or negative effect. For the whole year, 2023, this was PLN 8.3 billion, and you correctly mentioned that for the last quarter, it was PLN 2.5 billion. So it's actually a reverse of the accounting movement or the settlement that we did in 2022. And it should be highlighted that this is pure accounting, let's say, exercise, non-cash activity, non-cash adjustment, accounting adjustment, non-cash adjustment.
Okay, so it's booked in gross margin, yes?
Gross margin, yes, correct. It's booked in gross margin.
Okay. So when I look at the Page 34 and see hedging in the Gas segment of 1.6, more or less, it's not the same thing, yes?
No, no, no. It's related to real hedging activity on the Gas activity.
Okay. Okay. Second question. Could you please tell us what is the share of Arabian crude in your throughputs in the fourth quarter? And can you tell us, is it possible to lower the consumption of Arabian crude or if it's not possible according to your contracts?
Okay, so if you look on the share of crude oils, so 10% is REBCO. So just to remind you, REBCO is still processing our Czech refineries. 40% is Arabian Light. There is no aim to decrease, of course, depending on the prices. We have some, let's say, possibilities to decrease or increase the share of exact crude oils. Between 20%-30% is Johan Sverdrup, so this is Norwegian crude oil that we are purchasing based on the contract that we signed with BP for 6 million tons of crude oil delivery in the mid of last year. W e have around 10% of WTI, and 10% is CPC and other lights together.
When I look at the prices of crude oil, I get the impression that the Arabian crude is the most expensive and the question is, can you-based on markets, I don't know, macro-can you lower the consumption? Is it good for you, or can you comment on it?
Hi, Karol Hołownia, Frost Energy here. Yeah, this crude, the Arabian crude is more expensive, but at the same time, the share of products that we get from covering that crude, especially gasoline and diesel, is by a few percentage points higher than in other cases. This is one answer. Answering to your previous question on decreasing, like, Arabian share of the slate. As a processor, we need, like, a base grade, base crude for our refineries. We can mix additional grade, but we need a base to keep stable processing of the crude.
In that case, we need a grade which is available in rather high amount and easily in our part of the world. So, taking into consideration that we have no REBCO, we need to have other source of crude, which is reliable and able to send us huge amounts of base crude.
Also referring, let's say to the contract with Saudi Aramco, please bear in mind that, let's say the quotations that you observe is not the real value that we have. Yes, we have a long-term contract with Saudi. This is a trustful partner. And also, please bear in mind that this is the long-term contract, and this gives us a, let's say, flexibility to deliver crude oil to any refinery when there is a need, yes? So, we had a possibility to decrease slightly, but I wouldn't say it will go down below 30%. And, just to, let's say, respond to also the case of the price of the crude oil. What I see right now, the other grades like WTI are very light are more expensive than Arabian Light. Arabian Light price for January is comparable to the Norwegian one.
Okay. So summing up, you don't think it will fall because it's... you need a reliable crude, which replaces REBCO or Urals. Okay.
Yeah.
Last question-
Generally.
Could you tell us what was the EBITDA of ex- LOTOS refining assets in the fourth quarter, please?
If you look generally of ex LOTOS assets, they generated, let's say, positive EBITDA at the level of PLN 0.1 billion.
In the Refining segment, yes? Or you're talking about total?
In total. This is, this is, this is the total, so this is, refining as well as upstream.
Okay. Okay, thank you. Thank you very much.
Thank you, Łukasz. Now we can move to Anna Kishm ariya. Anna, floor is yours.
Thank you very much for the opportunity. I have two questions. First, as you mentioned, the board will be reviewing the projects and projects pipeline. Is there any timeline when we should expect some kind of updates for the strategy or revisited plans? And the second question would be, the realized free cash flow, at least, per my understanding, does not provide for the, dividend, above the base level. Is the assumption right, or given the strong balance sheet, there could be some surprises? Any, any color on that would be helpful. Thank you.
Hi, Robert Soszyński speaking. So what we are doing right now with the actual Management Board and the Supervisory Board, we are providing information, and altogether we are reviewing the portfolio of our assets. So that's first. Second, you know, we announced the strategy last year, actually, and our approach is that every two years we will be thinking about updating it, given the surrounding. But, as of today, I would say that, the analysis are ongoing, but I wouldn't expect significant changes in the strategy going forward.
Hi, this is me again. So I'll try to address your question on the dividend. So generally, our calculation are bringing us to the similar conclusion that you have presented. Yes, it looks that we will most likely go towards the base dividend base of the quarter. Cash flow, we don't see a free cash flow big enough to speak about extraordinary dividend on the uplift of the dividend, especially here when having in mind, you know, the CapEx plans for the next year. However, please bear in mind that the full year results are still subject of the audit process. Something can change, but I would rather assume that we stay as a base dividend rather based in the countries. Okay.
... So just a reminder, the base level for this year according to our, let's say, progressive dividend policy is PLN 4.15 per share.
Thank you very much.
Okay, thank you, Anna. Now we can move to Tamás Pletser. Tamás, please, floor is yours.
Yes, thank you very much. Good morning. Two questions on my side. First, on Page 10, you mentioned this almost PLN 5 billion decline in the Refining EBITDA, and you basically said during the conference call that this is due to the lower trade margins, among other things. Am I correct with the presumption that this is mostly due to the lower Inland Premium you basically use when you price your fuel products? And this practice that you basically lowered this premium before October, so this practice, has it recently reversed? Do you plan to increase this Inland Premium? How much or how much power do we have to do that? That's my first question. And my second question would be also on your presentation.
I think you mentioned the payment and the receive of money to the price difference fund. The difference, I think you mentioned, is like almost PLN 10 billion. Am I? Do I understand this correctly, that in 2024, you expect roughly PLN 10 billion more payment into this fund than what you receive? Thank you.
So, speaking, I will take the first question. Yes, this is related partially to the Inland Premium. So, in terms of year-on-year, you may say that out of this almost PLN 5 billion, PLN 2.6 billion is lower trading margins year-on-year. However, I wouldn't say that the margins were very low in Q4. I would say that the base was extremely high, so Q4 2022, yes? Please bear in mind that, let's say when the war broke out, there was a lack of final products available on the market, so Inland Premium increased significantly from the period of second quarter 2022, reaching, let's say, maximum level in Q4 2022.
However, from the beginning of 2023, so from Q1 2023, the level of Inland Premium started to normalize. And in Q4, we may say so that we are at the level in terms of Inland Premium comparing to the pre-war in Ukraine. I don't know if you are satisfied with my answer. However, let's say the Inland Premiums are already at normalized level pre-war. So, the drop year-on-year, the level of PLN -2.6 billion, resulted mainly from the very high base that was not observed in the history previously.
In the terms of the payment, the price difference payment funds coming from our upstream Polish gas upstream, the current regulation is that the company is obliged to pay PLN 15.5 billion fixed contribution to the payment fund. So it will be paid in 6 even tranches, divided into shown into the first half results as a cost of the segment. While on the other hand, we are targeting up to PLN 5 billion of possible compensation that may come from the price difference payment funds to our Tariff business, right? So this includes gas household clients, distribution services, energy sales, and so on.
So basically, we have a different situation that we had in 2023, when we contributed to the price difference payment fund with the amount of roughly PLN 12 billion from Polish Upstream, and then we received more than we put into the fund in the forms of compensation. So this is a significant change in the way this mechanism works for 2024 compared to 2023.
Maybe just to add on the top of what Marcin mentioned, to make sure that we have all the full understanding of the mechanism, the compensation that are granted to our companies are fully covered the loss on the sales of gas, electricity and electricity to the customers. So, they are just compensating the loss of sales. So the net effect, if you want to understand the net effect on our results, for the whole year, is actually what we are paying to the contribution fund. So the negative net effect will be PLN 15.4 billion.
Thanks. Thanks very much. It's very, very clear.
Okay, so we have still, Łukasz Prokopiuk in, in queue. Łukasz, would you like to ask a question?
No, I think, I asked all my questions for now. Thank you.
Okay. There are no raised hands in our queue. If you would like to ask a question, please raise your hands by pressing star five on your telephone keypad. We'll now wait if there is someone wanted to join the queue. Okay, so it's. So with no further questions coming from the participants, we may now conclude the conference call.
Yeah. So thank you very much for attending the conference call. Thank you very much for the questions. I hope that we review as much as we could, and you are satisfied with the answers and what I can say, have a nice day. Take care. Bye.