Polish oil company PKN Orlen has unveiled plans for a multi-million euro restructuring aimed at building its share of the northern German fuel retail market to 10% by 2009.
PKN considered divesting or downsizing the German operation, but instead settled on an option of restructuring coupled with network development, the company said.
This scenario assumes the restructuring of the management structures of Orlen Deutschland, optimization of the operating costs of stations, exclusion of several dozen unprofitable stations from the network and enhanced economies of scale through the procurement of facilities in new sites. The firm hopes this will result in it gaining a 10% market share in northern Germany. However this option does not preclude the possibility of selling assets on beneficial terms.
One-off costs of the implementation of all assumptions of the recommended option (restructuring and development) are estimated at E81 million, including E50 million for the procurement and re-branding of the acquired facilities.
Separately, PKN Orlen has also announced its Q3 results. The company achieved a record net income of PLN980 million. The return on average capital employed equaled to 18.3%, while gross earnings amounted to PLN1.6 billion.
We view the improvement in results with satisfaction, although the business outlook was not beneficial to all segments of our operations, said Pawe Szymanski, chief financial officer of PKN.