Poland's state-controlled energy group Orlen saw its shares rise 2.5% on Thursday after releasing fourth-quarter 2025 results that combined a stronger-than-expected measure of core operating earnings with a disappointing net profit figure.
Adjusted EBITDA under the LIFO method, which accounts for inventory values and impairment adjustments, came in at 12.15 billion zlotys ($3.40 billion) for the quarter. Although that represented a 15% year-on-year decline, it exceeded the analysts' consensus of 11.4 billion zlotys.
The outperformance on adjusted EBITDA was largely attributable to a marked improvement in Orlen's refining business. Management flagged higher model refining margins in the quarter, a development the company linked to constrained diesel exports following sanctions and Ukrainian drone attacks on Russian infrastructure. Those downstream gains helped offset headwinds from weaker commodity markets, with Brent crude averaging nearly 15% lower and gas prices retreating from year-ago levels.
Net profit, however, came in at 3.13 billion zlotys for the quarter, well below the 4.8 billion zlotys analysts had forecast. The shortfall was driven by net impairment losses totaling 3.34 billion zlotys on non-current assets, including a 2.2 billion zloty impairment in the downstream segment.
Orlen said the downstream impairment hit refining and petrochemical activities. That included writedowns related to "New Chemistry," which the company describes as a scaled-down iteration of its Olefins petrochemical project intended to reduce costs.
Alongside the results, Orlen disclosed plans to lift capital expenditure to 36.3 billion zlotys in 2026, up from 32.6 billion zlotys in 2025.
Erste Group analyst Tamas Pletser called the fourth quarter "a good period for the Polish energy giant," pointing to the "very strong contribution of refining" amid favourable margin conditions.
Investors reacted positively to the earnings mix and guidance, helping to nudge Poland's blue-chip WIG20 index up 0.5% in morning trading.
Market context and implications
The results underscore a divergence between Orlen's core operational cash generation and its headline profitability once impairment charges are included. Refining margins acted as a counterweight to softer crude and gas prices, while the impairments and higher planned capital spending point to elevated near-term balance sheet and investment commitments.
For sectors tied to energy and refining, the quarter highlights how downstream margin swings can materially influence operating earnings even when commodity prices are weakening. The reported impairments and the description of a smaller-scale petrochemical concept suggest management is recalibrating longer-term project scope and cost exposure.