Letter from the Chairwoman of the Supervisory Board
Ladies and Gentlemen,
2015 saw the record- high price of the PKN ORLEN stock, continued increase in the Company’s value, and strengthening of PKN ORLEN’s competitive position. With its modern structure, perfectly organised internal processes and world-class management, the ORLEN Group successfully exploits the opportunities created by the favourable macroeconomic environment, low crude oil prices and sound margins, both in its refining and petrochemical business.
The Company’s strategy has been consistently implemented. Investment projects are being executed in the refining and petrochemical segments, and modern power generation capacities are being built with a view to completing the value chain. These projects not only serve industrial purposes but also benefit the local community.
PKN ORLEN is dynamically growing in the Retail segment, responding to customer expectations with an attractive offering as part of its fleet and loyalty schemes.
In the Upstream segment, the Group is developing domestic production capacities, which already generate economically viable hydrocarbon flows. This was made possible by the development of know-how and competence in this area through, inter alia, acquisitions and production activities in Canada. While upstream operations still represent a minor segment of PKN ORLEN’s business, they are being consistently built in line with the adopted strategy.
In its operating activities, the Group continued ownership changes and organisational streamlining projects at the companies, enhancing operational transparency of the entire Group and optimising the economics and structure of business processes, while maintaining the security of operations.
Particular emphasis has been placed on innovation: a number of new innovative projects have been launched, which are expected to foster growth of the Group’s core business and potentially also its auxiliary activities. Another area of focus has been the development of the ORLEN Group’s corporate social responsibility, which is seen as a material aspect of a modern company, building its economic value, as well as the value of the best Polish brand.
As in the previous years, the Company’s shareholders could count on a stable and predictable dividend policy, which lends credibility to high operating standards and performance. PKN ORLEN has also implemented the highest standards of corporate governance and stakeholder relations. In 2015, it adopted the integrated reporting formula, with PKN ORLEN’s Integrated Report for 2014 presenting both financial and non-financial aspects of the Company’s operations and interactions between these two areas. The report in this form, as well as the standards followed in day-to-day communication with investors, met with recognition from independent experts, as evidenced by the awards received in The Best Annual Report contest: for the best integrated report, report published in the Internet, the best application of IFRS/IAS, and the special Best of the Best award.
No disruptions to the activities, budgeting or operation of the Company’s governing bodies occurred in 2015. Changes introduced in the composition of the Management Board in 2015 guarantee strong leadership, as well as efficient and concerted work of the Management Board.
2015 was also a year of analysing the Company’s mid- and long-term growth directions in the volatile global environment. As 2017 is the last year of PKN ORLEN’s mid-term strategy, in 2016 these analyses will have to be continued and closed with conclusions. In the fast-changing and hardly predictable world, this is a major challenge and great responsibility for the Management Board, Supervisory Board and the Shareholders. Given the stability of the Group, as well as its well organised and orderly structure, I do believe that 2016 will prove another successful year for PKN ORLEN.