Poland's Orlen plans to invest 380 billion zlotys by 2035 [updated]
WARSAW/GDANSK, Jan 9 (Reuters) - Poland's oil refiner and petrol retailer Orlen plans to invest between 350 billion and 380 billion zlotys ($84.3 billion and $91.5 billion) by 2035, it said on Thursday as it unveiled its new strategy.
That compares with 320 billion zlotys of investments over an eight-year period envisaged in the 2022 strategy.
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Between 270 billion and 290 billion zlotys of the planned cumulative capital expenditures are to be flexible, allowing Orlen to actively manage its investment budget, it said.
Up to 85 billion zlotys will be allocated for potential equity investments, including mergers, acquisitions and partnerships, it added.
As of 1200 GMT, Orlen's shares were down 1.2% after falling as much as 3.2% shortly after the strategy announcement.
"At first glance, the strategy is a little bit of disappointing for us as the key strategic directions remains unchanged compared to the strategy set up by the previous management," Erste analyst Tamas Pletser said.
The new strategy follows the management's audit of more than 50 projects undertaken by prior executives and the group's decision to scale back and rename its Olefins petrochemical project.
Pletser added Orlen's capital expenditure target is still very high and top-headed, as it is concentrated on the period between 2025 and 2030.
The company aims to meet all of Poland's domestic natural gas demand over the next decade by increasing production from 9.1 to 12 billion cubic meters (bcm) per year and boosting liquefied natural gas (LNG) contracting from 4.8 to 15 bcm annually.
It plans to add 4.3 gigawatts (GW) of gas-fired power generation capacity, 1.4 GW of energy storage, and develop four offshore wind farms and at least two small modular reactors totalling 600 megawatts (MW).
Orlen will increase its guaranteed dividend payout in 2025 from 4.30 to 4.50 zlotys per share, maintaining an annual increase of 0.15 zlotys thereafter, with flexibility to recommend higher payouts of up to 25% of annual operating cash flows reduced by financing costs.
It targets 2025 earnings before depreciation and amortization, excluding inventory effects - known as EBITDA LIFO - of 53 billion to 58 billion zlotys, with cumulative earnings for the key metric ranging from 500 billion to 550 billion zlotys over the 10-year period.
($1 = 4.1528 zlotys)
(Reporting by Rafal W. Nowak and Marek Strzelecki; Editing by Milla Nissi)