* PKN Orlen <PKNA.WA> Q3 net profit PLN 21 mln
* Lotos <LTOS.WA> net loss at PLN 238 mln
* Both co's earnings weaker than expected
* Refiners blame zloty, inventory revaluations
* PKN stock down 11.5 pct, Lotos down 8.6 pct
(Adds management comments, updates price)
By Patryk Wasilewski and Pawel Bernat
WARSAW, Nov 13 (Reuters) - Polish refiners PKN Orlen
<PKNA.WA> and Lotos <LTOS.WA> posted weaker-than-expected
third-quarter earnings on Thursday on the back of inventory
revaluation losses and currency operations.
PKN's net profit fell 96 percent year-on-year to 21 million
zlotys ($7 million), while Lotos plunged to a 238 million zloty
net loss from a 230 million net profit year earlier.
The results knocked PKN shares down 11.5 percent to 26.30
zlotys, while Lotos fell 8.6 percent to 16.15 zlotys. Warsaw's
WIG20 main stock index lost 4.3 percent.
Both companies expect adverse conditions to continue in the
fourth quarter, with most likely further writedowns on inventory
valuations and losses on financial operations.
"Should the current situation on the financial market
continue, it cannot be ruled out we will also have a loss on
financial operations in the fourth quarter," said Lotos CFO
Mariusz Machajewski.
Lotos said in its filing that it had 319 million zlotys in
losses on financial operations in the quarter, mainly on hedging
operations on the zloty and refining margins.
PKN Orlen's CFO Slawomir Jedrzejczyk also warned the company
might be further hit by inventory revaluations in the fourth
quarter after suffering a 316 million zloty one-off in the
third.
PKN, the country's largest refiner, also declared it would
seek buyers for its chemical arm Anwil next year, if it gets the
necessary permission from the supervisory board.
"If the supervisory board approves the strategy then we
would want to sell Anwil by end 2009," Orlen Chief executive
Jacek Krawiec told reporters on Thursday.
The supervisory board is dominated by representatives of the
state, the company's largest stakeholder, who appointed Krawiec
to take the helm of PKN Orlen.
The third-quarter results were weaker than expected.
Analysts had on average put PKN's profit at 71 million zlotys,
while forecasting a net loss of 35 million for Lotos.
"Both results are pretty weak," said ING analyst Tamas
Pletser. "PKN, at least, met expectations on the operating side,
but it was probably a bigger shock to see such a small profit,
especially in the environment when refining margins are rising."
In the first half, both PKN Orlen and Lotos benefited from
inventory gains as crude prices rose, but now both are suffering
as the trend reverses.
Oil prices <CLc1> fell in the third quarter from more than
$127 per barrel to just under $100, having hit an all-time
record of $147/bbl. They are now just over $55/bbl.
PKN's Czech unit Unipetrol <> also disappointed
investors with a net profit of 552 million crowns ($100
million), below the 576 million expected by analysts.
It had a loss of 1.27 billion in the year-earlier period,
due to protracted shutdowns as margins in the quarter were hurt
by high oil prices. Unipetrol shares fell 4 percent to 119
crowns.
(Additional reporting by Piotr Skolimowski, editing by Will
Waterman)
