MOSCOW (MRC) — Poland's second biggest oil refiner Lotos wants to buy local petrol stations and foreign oil deposits to strengthen its position in the market, its CEO said, adding the plans could hit its dividend payout, as per Hydrocarbonprocessing.
Earlier on Thursday, Lotos reported a bigger than expected rise in third quarter net profit, sending its shares to their highest level in 6 mos. Profits were buoyed by the reversal of a writedown, as well as higher sales, margins and throughput after 2016 refinery shutdowns.
But the company's own oil production fell by 6% year on year, mostly due to its aging deposits in Norway. "I hope that this is the last conference at which I am saying that the output is falling. Without an acquisition, the trend will not reverse," Chief Executive Marcin Jastrzebski told the results conference.
He reiterated Lotos was looking for deposits in production phase in Norway and Britain's part of the North Sea. Lotos, whose net debt stood at 3.3 B zlotys (USD916 MM) at the end of September, is also looking to buy petrol stations in Poland to increase its total to around 1,000 from 485 currently.
"Getting to about 1,000 stations would enable us to have a bigger say in retail business," Jastrzebski told reporters. "I hope that investors would forgive us if we were to make significant acquisitions in upstream and retail, which would make paying out dividends difficult."
This year, Lotos paid its first dividend in 10 yr. The CEO also said Lotos wanted to retain its ability to make dividend payments.