Ladies and Gentlemen,
When I invited you to read our 2019 annual
report, I pledged to spare no effort to
minimise the impact of the pandemic on
Grupa Azoty Zakłady Chemiczne Police S.A.’s
operations in 2020. Today, I am pleased to
say that despite the challenging market environment created by the ongoing coronavirus
pandemic and other factors, our Company was able to maintain financial security and deliver
solid results.
Consolidated EBITDA was close to PLN 195m, having increased over PLN 19m year on year. The
Parent’s EBITDA reached over PLN 209m, up almost PLN 15m year on year. Consolidated net
profit was just under PLN 124m, up over PLN 80m compared with the previous year.
Consolidated revenue for 2020 reached almost PLN 2,428m and was close to the 2019 level,
which is good news considering the ongoing pandemic.
Sales performance was driven chiefly by movements in prices of products and feedstocks. Last
year saw major year-on-year declines in average selling prices of products and falling prices of
many feedstocks, particularly natural gas. Thus, lower cost of feedstocks largely offset the
impact of a significant decrease in average selling prices. The direction of these changes
reflected the trends prevailing on the market.
The year 2020 was an unusual period for Grupa Azoty Zakłady Chemiczne Police S.A., and not
only due to the ongoing pandemic and related business restrictions. Last year, the Company
recorded several extraordinary events with a significant impact on its operations and financial
performance, as further discussed in the report.
In 2020, we put a lot of hard work into our flagship project Polimery Police, which culminated
with the announcement in March 2021 of 50% completion of the contracted work, which
included engineering, procurement and construction work. The latter is now over 30%
complete. Regular deliveries of key project equipment and appliances are received at Police.
Tank assembly work is under way at the site of the future cargo handling and storage
terminal. Although the pace of work and the achieved milestones make us optimistic about
the future, we are constantly monitoring the situation to be ready to deal with any possible
scenario.
In 2020, we closed the process to raise funds for Polimery Police, with key investment deals
and agreements with a syndicate of financing institutions signed on May 31st. As a result,
Grupa LOTOS S.A., Hyundai Engineering Co., Ltd. and Korea Overseas Infrastructure & Urban
Development Corporation joined the project as its shareholders. The fundraising could not
have been closed without our consistent efforts and a successful share issue process. All issue
proceeds were transferred to the project in the form of share capital contributions and
subordinated loans.
Although Polimery Police is a huge undertaking, please note the Company is implementing a
number of other projects, including an over PLN 100m project to upgrade its water
pretreatment station and to expand the existing water demineralisation station. The project
will almost double our demineralised water production capacity. We made progress on the
PLN 56m upgrade of the main power supply point, a project aimed at raising the available
supply capacity to meet the increased demand for electricity resulting from the construction
of a polymer plant.
As a socially responsible company, Grupa Azoty Zakłady Chemiczne Police S.A. engaged in
various local projects consistent with its stated CSR and sponsorship policy despite the ongoing
pandemic, with its efforts focused on sports initiatives. We also continued our collaboration
with Foundation for Polish Values, which provides support to Poles living in the Eastern
Borderlands. Guided by the sense of responsibility for our local communities facing a difficult
time, we gave priority to entities engaged in the effort to prevent and combat COVID-19.
Various institutions, including the Provincial Sanitary and Epidemiological Station in Szczecin,
the Pomeranian Medical University in Szczecin and the Regional Hospital in Kołobrzeg, were
provided with funds to purchase specialist equipment. Since the outbreak of the pandemic,
we have allocated over one million złoty to fight the disease.
I would like to take this opportunity to thank all employees of the Grupa Azoty Zakłady
Chemiczne Police Group for their commitment to growing the company and building its value.
Despite the ongoing fight against the pandemic, we maintained the continuity of our
production and sales processes. We are constantly monitoring the situation in Poland,
adjusting our internal procedures to ensure the safety of our employees and the plant. I also
extend my thanks to the Company’s Supervisory Board for their support and cooperation.
I invite you to read our annual report below.
Yours faithfully,
President of the Management Board, Chief Executive Officer
Grupa Azoty Zakłady Chemiczne Police S.A.
Wojciech Wardacki, Ph.D.
