PKN Orlen reduced planned investments in Poland and the Czech Republic by about 1 billion zloty ($347 million) a year through 2012, Puls Biznesu reported. The company, which presented a five-year investment strategy two days ago, will spend less than initially planned on hydrocracking, oil storage, pipelines and gas stations, Puls said, citing Chief Financial Officer Pawel Szymanski. The saved money will be used to finance the expansion of its Lithuanian unit, AB Mazeikiu Nafta, the newspaper added.
Our view: In average the Capex for all segments remained the same with the exception of refining segment, where the investments in Mazeikiu were added. As we wrote yesterday, the company decided to cut or to postpone strategically less important projects like pipelines and oil storage. The hydrocracker expansion at Plock might be postponed, but the valuation impact of this decision would be minor. The retail expenditures remained the same in average when compared to the previous strategy plan. However some of these amounts should now be spent on Mazeikiu, which we believe would not exceed US$20-25m. We do not think that the retail expansion in Poland and Czech Republic could be significantly hurt because of this.