The link between financial and production capitals follows directly from the updated strategy for 2019–2022, which provides for expanding and enhancing petrochemical production, entering the low-carbon energy sector in Downstream, consistently growing retail sales, and sustainably developing hydrocarbon E&P operations. The Company’s CAPEX budget for 2019–2020 will average PLN 6.8bn annually, an increase of PLN 2.2bn over 2017–2018. Of that amount, PLN 4.9bn has been allocated to Downstream, PLN 0.7bn will be invested in Retail and PLN 0.7bn will be spent on Upstream projects. The target full-year LIFO-based EBITDA for the period will average PLN 10.3bn, up by PLN 1.1bn from 2017– 2018.
Financial capital is a driver of natural capital, enabling ambitious investments and acquisitions in the low-carbon energy sector. In the short term, the construction of offshore wind farms will be completed and green capacities of the Energa Group will be integrated into the Group’s asset base. The planned acquisition of Grupa LOTOS is expected to significantly expand the ORLEN Group’s new mobility capacities, representing a strategic growth opportunity. A letter of intent was also signed with PESA Bydgoszcz in 2019 on the development of hydrogen powered rail transport.
As at December 31st 2019, the largest item of the ORLEN Group’s assets was property, plant and equipment, which increased by PLN 1.0bn, to PLN 32.4bn. In 2019, the ORLEN Group’s capital expenditure on property, plant and equipment was PLN 4.1bn, down by PLN (0.1)bn year on year.
For more information on financial capital, see the ‘Financial results’ section.