Orlen SA
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Good morning, ladies and gentlemen, and welcome to today's conference call, which will be devoted to the financial performance of the ORLEN Group after the second -- fourth quarter of 2022. Today's speakers include Jan Szewczak, Management Board member of Finance at PKN ORLEN and Mr. Armen Artwich, Management Board member for Corporate Affairs. A warm welcome also to the representatives of the media and our followers on social media as well. Good afternoon again, and let me now give the floor over to my fellow speakers.
Welcome to the next conference call that will summarize the second -- the fourth quarter 2022, which is of major importance and this meeting today with you because it recapitulates the long process of merger processes, M&A processes in respect of the LOTOS Group and the acquisition of PGNiG and the group. As a result, today in Poland and in the CEE region, we have formed one of Europe's largest corporation, serving 100 million of clients. And in terms of revenue, 1 of 150 largest biggest companies in the world and in Europe, and we will not rest on our -- on those laurels on the revenue that we will discuss today because we see quite a potential to increase those revenues in the future as well.
Before I move on to discussing the details. As usual, traditionally, I would like to, on behalf of Mr. Daniel Obajtek, Management Board President and CEO of PKN ORLEN and on behalf of all members of the Management Board, I would like to extend my warmest gratitude and warmest thanks to all employees across the ORLEN Group who contributed to such a solid, robust results for the fourth quarter of the year, but also for the entire year 2022.
In terms of major events, some key facts and figures for the fourth quarter. I'll discuss them right now and then move on to a detailed discussion. First of all, we finalized the merger with PGNiG Group. Secondly, and -- it's for the security of -- for the energy security of Poland, we secured is very important. We secured crude oil deliveries from Saudi Arabia, and we completed our agreement or concluded our agreement with Saudi Aramco, which guarantees the deliveries of nearly 20 million tons of crude oil in such a difficult time considering that the supplies from Russia from the Eastern part of the world for us were stopped altogether. And as a result, we were able to stabilize the Polish market and also some of the market of some of the countries in the region. And the stabilization consists in stable deliveries, and securing a relatively low prices, both for gasoline and diesel oil.
Other key facts and figures for the fourth quarter included the acquisition of Petrochemical assets from Basell Orlen polyolefins, which guarantee 100,000 tonnes of the yearly capacity of LDPE, low density polyethylene, which is very important -- a very important product for our markets. We are planning to increase our crude oil production by nearly 47 million barrels of oil equivalents as well as the production of natural gas by 9 bcm in Norway as of 2027.
Moreover, we also obtained the shares in the next 4 exploration licenses by PGNiG Upstream Norway as well as LOTOS Exploration, Production Norge. We also strengthened -- significantly strengthened LNG supplies to Poland, both in the context of the 20-year contract with an American company, Sempra, for the purchase of American LNG. We're talking about 1.3 bcm of LNG per year, the beginning of supplies is planned for 2027. However, the contract has already been signed as well as the fact that we built our own fleet of 8 gas carriers, which will be brought on stream by 2025. However, the first of those gas carriers already sells with gas to pull it.
We are planning investments in both logistics and production assets in the Gdansk, and Mr. Obajtek has already informed you that we're talking about a transshipment terminal on the Martwa Wisla River as well as building the Hydrocracking Oil unit. We are also considering certain petrochemical investments, together with our partner, Saudi Aramco in Gdansk. There are a number of ideas in this area. We're working on it.
This is a major partner. It is an important business partner and a wealthy partner that has modern state-of-the-art technologies under their belt, and we will be able to use those technologies, which is a very important -- or crucial importance because such patents or licenses nowadays are very costly. Our venture capital fund plans further investments in new state-of-the-art technologies which will ensure faster and more environmentally friendly production of semi products that are used in the production of automotive products as well as medicine, plastics, bio, additives to fuels. So we are talking about our focus on the share of scientific world in our projects.
We also appointed an officer or representative for climate and sustainability. This is obviously global standard nowadays. We will strive to public -- to have our complete carbon footprint and publish or disclose our carbon footprint. We're talking about Scope 3 reporting, which will allow us to calculate greenhouse gas emissions along the entire value chain.
We're talking about the new requirements that are in place today, and we want to do our best in order to meet those requirements and react accordingly and as fast as possible. We completed the construction of one of the largest PV farms in Poland, total capacity of 62 megawatts. We're applying investments to reduce water intake from the Vistula river that is used for technological processes at Plock.
We are planning to bring it down by 25%, which is of major importance because water is a major aspect in the process -- sustainability process. We're also planning the construction of the first biogas plant in Poland in order to reduce CO2 emissions in truck transport -- road transports by truck.
And on a lighter note, somewhat, we also extended our cooperation with the Polish Football Association for yet another 4 years and we want to -- we are planning and hoping to see the results of our football -- national football team that will be comparable to the results reported by PKN ORLEN. PKN ORLEN for the 12th time in a row was awarded Top Employer, Polska title. The title that is awarded to Poland's best employers across the country.
We are doing our best in order to meet the highest people standards across the group. We're not talking only about PKN ORLEN but also about ANWIL and ORLEN Unipetrol. So we have been recognized in this aspect and awarded duly. In terms of the growth on our petrochemical muscle which is obviously of major importance to us, I've already mentioned about Basell Orlen polyolefins and petrochemical assets, which will secure 1/3 of national supply -- national demand for this product.
Speaking of licenses, we secured 4 more licenses -- exploration licenses in Norway. We want to increase the production of crude oil there significantly in coming years. I've already mentioned about our fleet of gas carriers. Today, it is not easy to purchase gas carriers even for cash. Not to mention the timelines for bringing those on stream, we're talking about lengthy processes of many years. However, we managed to meet our business targets here, and we will have 8 such gas carriers.
I've already mentioned about the contract with Sempra infrastructure. A couple of weeks ago, we had a visit from representative of Sempra infrastructure and also ambassador, his excellency, Mr. [ Brzezinski ] and together with Daniel Obajtek, our CEO. They reported that we will, together with our partners -- and that we will increase our business cooperation with the American side in terms of the production of hydrocarbons.
We will and we want to invest in the transshipment terminal on the Martwa Wisla in Gdansk, and I can also mention at this point that the fourth quarter of the year was characterized by high volatility of all macro parameters compared to the previous year year-on-year.
We see a major impact of the war in Ukraine and practically every single aspect of our operation is affected by this very sad event. We have just -- we are -- today, we have the first anniversary of this aggression where our neighbor was invaded and we want to do our best, and we are doing our best as a corporation, as a company. We want to help our neighbor. We want to secure our partners from Ukraine and our neighbors in general.
For over a year, we are facing -- we have been facing this very hostile and volatile business environment. We have mentioned it already during our previous conference calls. In terms of model refining margins to bring down prices of crude oil and ready products fuels, these were affected by higher demand for diesel oil because of the concerns about its availability on the back of the EU wide ban on the imports of fuels from Russia. And everybody across Europe, we're afraid that diesel oil will be and would be unavailable, and they purchased it, stock. We have secured stock of diesel oil. And in the last couple of weeks, we drove down or reduced all these oil prices across Poland and all our field stations.
So this is a sign that building a multiutility corporation based on a couple of pillars with a good choice, and it corroborates that our decision was indeed a good one because Poland is on the safe side in terms of its energy security. We are increasing energy security based on our corporation with very solid partners across or along our supply chains, we can say that nearly 90% of our energy feedstocks and crude oil come from non-Russian sources.
And in terms of gas, 100% of our gas supplies come from non-Russian sources. This is the proof that we are doing our best, and we meet all the sanctions introduced or imposed by the European Union in this area. In terms of differential, it goes down quarter -- has been going down quarter-on-quarter due to limitations on the processing of Russian crude. We had a long-term contract with [indiscernible] with -- on the supplies of products.
This will expire naturally. And if there are early decisions taken by the European Union, we will obviously meet those targets and those decisions in no time. In terms of our macro environment, in general, it was not that good as before, model petrochemical margin went down 15% year-on-year on the back of lower margins across the petrochemical chain. Natural gas price on the TGE went up obviously, which translated into higher costs, was combined by reduced consumption of gas across the group, but we see that our clients -- for instance, entrepreneurs, they also reduced the consumption of -- their consumption of gas, and we managed to drive it down by 30% year-on-year, which was a major decrease. Another major element that affected or influenced our operational results was a relatively weak exchange rate, PLN versus U.S. dollar and Euro. That's worth pointing out that in December 2022, we had a temporary level of PLN 5, which obviously shows the importance or the impact of currency rates at, for instance, the purchase prices of our feedstocks.
The next slide presents a decreasing consumption of fuels as a result of economic slump or slow down. So you will see quite clearly that there have been sign of an economic slowdown in terms of GDP, which went down across all our markets. In Lithuania, we had a major decrease down to a negative number. This is related to the huge inflation rate in the Baltic states and the Baltic states, especially we see raging inflation despite the fact that those countries have already adopted euro as a currency.
Relatively speaking, compared to those countries, Poland, looking good and consumption of fuel in the fourth quarter of the year, was lower in general across the board, across all our markets. In terms of our financial results and the performance of PKN ORLEN Group, let me start by saying that in terms of revenue, in quarter 4 alone, we reported PLN 100 billion of revenue, mainly on the back of higher sales volumes, but also due to consolidation with -- based on acquisition of LOTOS Group and PGNiG Group as well as higher quotations of refining products combined with lower acquisitions of Petrochemical products.
In terms of the revenue for the entire year, we're talking about PLN 280 billion in revenue for 2022. And as I said, this is not our last word. We will not rest on our laurels here. I have already mentioned that this was an effect of mainly increased sales volumes, and we'll continue that. In terms of LIFO-based EBITDA, that is the operating profit. We are reporting an increase by PLN 11.8 billion year-on-year, mainly on the back of consolidation of the results reported by LOTOS Group and PGNiG Group from the amount of PLN 7.4 billion.
Operating profit LIFO-based EBITDA came in nominally -- in nominal terms at PLN 16 billion, which was up year-on-year by PLN 11.8 billion, mainly, as I said, on the back of consolidation and our efforts related to consolidation. Obviously, those effects were limited or offset by the negative impact of the effects of hedging and also currency effects. However, these effects were also offset by the negative -- by lower petrochemical margins as well as the valuation of CO2 contracts.
We saw major volatility here in terms of the prices of these [indiscernible]. And also, we have to remember about the usage of historical inventory layers as well as higher overheads and labor costs. EBITDA at PLN 0.5 billion, was a result of the surplus of positive foreign exchange differences as well as the net impact of settlement and valuation of derivative financial instruments combined with a negative impact of interest costs.
Net result at PLN 0.1 (sic) [ 8.1 ] billion in the fourth quarter 2022 alone. This obviously does not include the one-off profit on the bargain purchase of the PGNiG Group, which came in at PLN 8.2 billion. The negative effect of the changes in the prices of crude oil, that is the LIFO effect, came in at PLN 1.8 billion, which drove down our EBITDA figure to PLN 14.2 billion.
It's worth mentioning at this point that PKN ORLEN is the largest payer of tax in Poland. And for a number of years, for a couple of years, we are transferring huge amounts of money. We're talking to the state budget. We are talking about PLN 40-plus billion per year. At the same time, exhibiting certain social sensitivity and responsibility in the context of legislative measures, governmental measures related to the production of consumers, especially the most sensitive consumers in Poland. You know very well what we're talking about. We are talking about certain groups of entrepreneurs. We are also talking about gas prices. We are responsible in this respect. We react quickly, and we are doing our best in order to alleviate those problems for these groups of customers and entrepreneurs especially in view of certain price stocks across the market.
For instance, the price of diesel oil, everybody wanted to buy diesel oil on stock before February 5. As we have mentioned, we had no stocks whatsoever at our fuel stations. Although more so, we drove down the prices. As I said before, we drove down the price or reduce the prices of diesel oil in our fuel stations. In terms of the breakdown by segment, obviously, on a very general note because it will be discussed in more detail by my fellow speakers, Mr. Artwich. However, in terms of refinery -- refining, we are talking about an increase by PLN 8 billion year-on-year due to mainly the positive macro impact as well as the consolidation of the LOTOS Group in the amount of PLN 3.6 billion. Those effects were, as I said, offset by a negative impact of the valuation of CO2 contracts and certificates. In terms of the petchem business, we are talking about PLN 0.6 billion, and this was a decrease by PLN 0.8 billion mainly due to the negative impact of macro, lower sales volumes as well as valuation of CO2 contracts again.
In terms of the energy segment, we are talking about PLN 0.5 billion, going up by PLN 0.2 billion year-on-year, mainly as a result of positive macro effect -- negative -- and also some negative impacts of -- for instance, lower sales volumes, consolidation of acquired PGNiG Group, higher overheads, higher labor costs as well as provisions for electricity agreements and talking about the customers from ORLEN Energa group. In terms of retail, we reported an increase by PLN 0.1 billion year-on-year due to positive macro as well as lower sales volumes.
It's worth pointing out that today, the share -- the actual share of retail in our profits and operational performance in Poland, we are talking about 3% only. So this is a very small share in terms of retail contribution to our performance, and we have to remember that we do not only sell fuels, but we also sell a number of -- range of various products, including cigarettes, food, sweet confectionery and hot dogs, the famous ORLEN hot dogs. But this shows that our profits are generated in other segments than retail.
It's important to mention that our solid performance was additionally strengthened by upstream, and we're talking about an increase by PLN 6.1 billion year-on-year, mainly on the back of consolidation of LOTOS Group and the PGNiG. We're talking about more than PLN 6 billion and positive contribution, but also we had a very positive macro impact and higher sales volumes.
In terms of gas, this is the only negative element. We're talking about minus PLN 2.2 billion year-on-year. Well, if you decide to acquire something, you have to acquire that with both positive and negative aspects. So in terms of gas, it was a negative contribution. The corporate functions, they were down based on higher costs, going up by PLN 0.4 billion due to higher or larger scale of ORLEN Group's operations, which have been upscale significantly because we're talking about a huge increase in terms of the number of employees, the headcount across the group.
Moving on to a more detailed discussion segment by segment, I'll now give the floor over to Mr. Armen Artwich, management Board member for corporate affairs.
Thank you very much for this introduction. And let me start by discussing the Refining segment.
In the second quarter, with the LIFO came in at PLN 10.1 billion, going up year-on-year by PLN 0.7 billion based on positive macro due to the, obviously, the current situation and war in Ukraine, which affected the fuel market situation and also exchange rates. Those effects were partially offset by hedging CO2 valuation -- CO2 contract valuation as well as basically higher crude oil prices across global markets. High -- sales volumes went up by 43% year-on-year, of which higher sales of gasoline by 30%, diesel by 53%, LPG by 61% and aviation fuel by 40%, combined by lower sales of HSFO fuel oil by -- down by 3%. Despite higher sales volumes, the volume effect was negative generally, mainly due to a change in the structure of the [indiscernible] going down by 22% because we had to replace Russian sources by other sources, for instance, Saudi Arabian sources.
Talking about sales, it went up in Poland by 75%, going up in the Czech Republic by 14% and 3% in Lithuania. I have already mentioned that a major impact -- positive impact on the refining segment's performance was due to our -- on the back of our acquisition of the PGNiG Group. Obviously, this was offset by higher overheads and higher labor costs. In terms of the operational data for the Refining segment, we have to say that our refineries operated in full swing in 2022. We processed 2.6 [indiscernible] at PKN ORLEN and the throughput went up in Poland by 2.6 million tonnes year-on-year, mainly based on throughput of Plock -- Gdansk refinery combined with a lower throughput of Plock refinery, mainly due to shutdown of unit as well as other negative impacts.
The share of fuels -- fuel yields was [indiscernible] year-on-year, combined with lower fuel yields at Plock refinery due to the shutdown mentioned before. We have reported higher throughput at ORLEN Unipetrol going up by 0.1 million tonnes year-on-year. In terms of ORLEN Lithuania, Lietuva, it was comparable in terms of the crude oil throughput year-on-year. We had no maintenance shutdowns or major maintenance shutdowns or installations.
We reported higher fuel yield by 1 percentage point year-on-year as a result of lower share of high sulphur crude oils in the throughput structure.
And we have to remember about the effect of war in Ukraine. In the fourth quarter, we sold more refining products, going up by 5% year-on-year, mainly on the back of consolidation of the refining assets in Gdansk. In terms of the results of the Petrochemical segment, we reported PLN 583 million for LIFO-based EBITDA, including the annual result, which was at PLN 168 million and a negative result for PTA compared to the previous year. We had a negative macro impact, including lower margins on olefins, polyolefins and PVC, the weakening of the exchange rate of euro against U.S. dollar as well as the negative effect of the valuation of CO2 contracts.
These effects were partially offset by higher margins on PTA as well as the hedging effect. In the fourth quarter, we reported lower sales volumes down -- going down 12% year-on-year, including lower sales of olefins by 23%, polyolefins going down by 2%, fertilizers going down by 22%, PVC down by 26%, combined with higher PTA sales by 28%. Other negative impact or other impact included mainly the negative impact of the usage of historical inventory layers as well as higher overhead and labor costs. In terms of the operational data for the petrochemical segment, we reported lower utilization on our main petrochemical installations, mainly due to market limitations as well as lower demand for petrochemical products.
We had lower utilization of both the olefins unit at Plock as well as BOP at Plock. And we also had a shutdown of installation at Plock in terms of metathesis due to decrease in demand, as I mentioned before. In terms of fertilizers at Wloclawek, we had limited availability of the installation in October and November and the PVC installation at Wloclawek as well saw a continuing decline in demand for PVC and was also impacted by the extended technological shutdown in the quarter 3 of 2022, which was extended to quarter 4.
In terms of PTA at Wloclawek, we reported smaller scope of maintenance shutdowns, but this was combined with limited demand. At Unipetrol in Czech Republic in the olefins unit, this work was adjusted to the availability of both PE2 and PE3. Sales amounted to 1.1 million tonnes and going down by 12% year-on-year, including lower sales in Poland, down by 12%, mainly due to maintenance shutdowns. This also applies to PVC and olefins as a result of lower demand. In Czech Republic, sales went down by 11% as a result of lower sales of benzene, fertilizers and PVC and in Lithuania it went down by 50% as a result of market challenges and limitations.
In the Energy segment, in the fourth quarter, we reported PLN 364 million in EBITDA LIFO, including a negative impact of the [ Energa ] Group as well as on the consolidation of PGNiG at minus PLN 152 million. We also saw a macro impact, which was positive year-on-year, combined with increase in gas prices and lower CO2 emission provisions as well as valuation of CO2 contracts, which was negative. Even though still we reported a negative volume effect as a result of the persisting gas prices -- high gas prices in terms of natural gas across all our markets, and this obviously impacted the results of the Energa Group. The item others included mainly provision for electricity contracts, in terms of the customers of the Energa group due to the approval of the tariff for 2023 as well as the implementation of regulations on energy prices.
And obviously, this was also due to the consolidation of the acquired PGNiG Group and higher fixed cost and labor overheads and labor costs, partially offset by the sale of contracted, but unused natural gas. In terms of heating, we reported an increase in average selling prices of heat by PGNiG TERMIKA combined with higher generation costs. In terms of the operational data for Energy segment in the fourth quarter, the ORLEN Group as a whole, produced 3.7 terawatt hours of electricity, of which nearly 50% was the heat coming from environment-friendly sources. Electricity production went up by 70% year-on-year as a result of new generation units.
Sales of electricity from PGNiG came in at 1.2 terawatt hours, which is comparable to the last year's result. Sales of electricity went down by 10% year-on-year as a result of lower wholesale and retail sales across the ENERGA Group. Electricity distribution was at a similar level year-on-year and going to 5.8 terawatt hours. [ Peak ] sales of the PGNiG Group amounted to 14.1 terawatt hours that was comparable to last year.
And we have to remember about higher temperatures in the quarter, going up by 1.4 degrees Celsius. In terms of the operational results or the results in general in terms of our Retail segment, the EBITDA came in at PLN 665 million, going up by PLN 92 million. We have to remember at this point about the lower base, which was due to the relatively low retail prices reported across the markets in the fourth quarter of the year. Sales volumes went down year-on-year in general, across the group, going down by 1%, including higher sales in Poland, the Czech Republic and Lithuania, but considerably lower in Germany due to certain conditions in the German wholesale market, mainly due to lower sales of diesel oil and higher -- this was combined with higher sales of gasoline and LPG. In the fourth quarter, we also reported higher operating cost of our fuel stations year-on-year.
In terms of the operational results of the Retail segment in the fourth quarter, sales volumes came in at 2.3 million tonnes. And as I said before, globally, it was down by 1% year-on-year, mainly on the back -- and this is very important, on the back of lower sales in Germany by as much as 19%. However, it was combined by higher sales in Poland by 6%, in the Czech Republic by 5% and Lithuania by 2%.
The number of fuel stations at the end of the year was at 3,097, going up by 216 year-on-year. So the number of fuel stations went up in Poland and Hungary. As a result, obviously, on the composition of LOTOS and the realization of remedies and in Slovakia as well as a result of the launch and the rebounding of self-service stations acquired by the local network. Market share increased in Poland and Slovakia, but it went down in the Czech Republic year-on-year.
The number of nonfuel locations went up year-on-year by 169, and it came in at 2,459, including in Poland, we are talking about 1,847, 333 in the Czech Republic, 173 in Germany and so on. We also have reported higher alternative fuel points number. We are talking about 637 such points, including 493 in Poland, 125 in Czech Republic and 19 in Germany. The ORLEN Paczka locations in Poland went up to 7,944, including 1,017 ORLEN fuel stations, 780 RUCH kiosks as well as 3,300 (sic) [ 4,300 ] partner points and 1,847 parcel machines.
In terms of upstream, the LIFO-based EBITDA figure came in at PLN 6.3 billion, and this was due, among others, by consolidation with the PGNiG Group, which surge -- resulted in a surge of the performance of our upstream segment. The result of the LOTOS Group, which we also acquired, had also a positive impact on our performance in terms of the Upstream segment by PLN 600 million. Obviously, we have positive macro effects at this point in terms of the prices of feedstocks.
However, compared to the third quarter, we saw a major decrease across -- the prices across our markets. The higher sales volumes that were reported by -- at 73%, of which higher sales of crude oil 7x as well as natural gas by 3% and NGL by 42%. We had higher -- we reported higher production figures in Poland and Norway. At the end of the year, total reserves came in at 175,000 of barrel oil equivalent, of which in Poland by 82,000, in Norway by 88,000. And we also need to remember about the effects -- positive effects in Pakistan, Lithuania and Canada.
In Canada, we reported decrease in production by 0.3000 of barrel oil equivalents per day. In terms of the breakdown, you can see the breakdown of our Upstream production on the slide. We will now move on to the new segment that is gas. We're talking about the segment that will include both distribution as well as trade and storage and the former PGNiG Group. As I said, the EBITDA figure was a negative figure, which was due to mainly high costs of the acquisition of gas, natural gas prices.
The peak and spot prices of gas came -- occurred at the end of the year, but the market reacts later. Therefore, the price went up by 5% year-on-year. All in all, we reported a loss, but at minus PLN 3.2 billion. However, it was partially offset by the result of distribution in terms of EBITDA because we're talking about an increase by PLN 0.4 billion year-on-year, mainly on the back of the positive balance, was an effect of higher prices and the balancing in general in the market.
The consumption of gas in Poland is going down and it is also affected by higher temperatures on average in this period. This translates into lower sales of gas. And we're talking about a decrease of 30.7 terawatt hours of natural gas. The volume of distribution of gas went down by 12% as well, down to [indiscernible] This resulted in the lower demand. And we're talking about a decrease of 0.2 billion cubic meters year-on-year. Almost 50% came from the LNG terminal at Swinoujscie where 18 carriers were unloaded. At the end of the year, we had a 97% level of gas storage in Poland. I will now give the floor over back to Mr. Szewczak, who will discuss our financial situation.
Starting from cash flow at Slide #23, you can see those figures. In terms of the fourth quarter, we generated our cash flow from operations at PLN 13.2 billion. This was offset by limited demand for working capital, down by minus 2% nearly as well as income taxes, at more than PLN 3 billion as well as the settlement of additional payments.
You can see all those figures on the bar chart. The net effect on investments came in at nearly PLN 8 billion, mainly due to the acquisition of the PGNiG and cash of this group at PLN 12.8 billion. Proceeds from shares sold to implement remedies relating to the LOTOS Group's acquisition at PLN 4.6 billion combined with our CapEx figure at nearly PLN 9 billion. In terms of the data for the entire year of 2022, LIFO-based EBITDA came in at nearly PLN 4 million in terms of our operational profit. LIFO effect was at PLN 1.1 billion. The demand for working capital went up by PLN 11 billion.
Our CapEx that is our investments came in at nearly PLN 20 billion in such a difficult year, combined, which is worth pointing out with lower debt down by PLN 14 billion in 2022.
So on the one hand, we had high CapEx. And also, we managed to have a strict control over our debt and financing in general. Our dividend was paid to our shareholders. We spent PLN 6.4 billion on the purchase of CO2 emission allowances. In terms of the acquisition of the LOTOS Group's assets, this was an effect of nearly PLN 7 billion.
As I said before, we also received PLN 16.3 million from sales of assets on the remedies related to those group. The next slide, Slide #24. We're talking about debt. As you can see, in the fourth quarter, we saw an increase -- sorry, a decrease of that quarter-on-quarter, mainly obviously to the positive impact of our investments at PLN 7.8 billion, combined with the negative effect of the repayment of loans and credits at nearly PLN 12.6 billion.
So this must be remembered that this is a negative impact. I've already mentioned about the dividend. The value of our obligatory reserve managers -- reserves in the balance sheet at the end of the last quarter of the year amounted to nearly PLN 12 billion. In terms of the net debt to EBITDA covenant at the end of the year, we had a practically negative or zero net debt-to-EBITDA figure.
This is very important in the context of our planned activities in the years to come.
In general, our financial sources are well diversified and the weighted average maturity is 2025. So we are very effective in terms of our mergers and acquisition processes and all this solid financial foundations of the ORLEN Group is both recognized and well estimated by the rating agencies as we can see that our -- as you can see, our ratings went up. We're upgraded to historically highest levels A3, stable outlook from Moody's, BBB+ stable outlook from Fitch. We are drawing to close of today's conference call, but Mr. Artwich now will discuss our OpEx and the planned CapEx for 2023.
Slide #25 presents our CapEx in 2022, which came in both for the Poland Group and also acquired PGNiG and ORLEN Group, came in at PLN 19.6 billion, of which around 50% went to finance Petrochem and energy products, which are the 2 basic pillars of operations. We also have a slide that presents -- on the slide, we also present our plans for our main growth projects as well as the increase in our operations on the back of M&A processes. So the CapEx that is planned will increase next year. Around 70% will be spent on growth projects, which will be split firmly between or among our main segments. This is all presented on the slide on the right-hand side. Most of our projects will be delivered in Poland, which translates into around 70% of our CapEx as well as in Norway, more than 10% of our overall CapEx figure. The maintenance CapEx will increase twofold, mainly due to more maintenance shutdowns as well as an increase in the prices of construction materials as well as services.
The next slide presents our macro environment in this quarter, quarter -- first quarter of the year. And we are talking about lower effect in terms of our stock. Total reserves were above the 5-year average, and this was the first such effect for the past 2 years, point to remember that the production in the United States went up and the production of crude oil in Norway went up as well. Our refining margin went down by 13% year -- quarter-on-quarter, mainly due to the negative effect, partially compensated by lower gas prices. Our diesel margins went down basically on the back of lower supply in the market and the Embargo on fuels imported from Russia. Our petrochemical margin went down in the quarter, mainly due to lower demand for petrochemical products due to economic slowdown. Both annually and quarterly, we reported a significant decrease in gas prices in the TTF and TGE market. On the back of mild winter and high imports of an LNG, PLN strengthened versus the U.S. dollar by 6% quarter-on-quarter, combined with the same flat level versus the euro.
In terms of the market outlook, which is presented on Slide #29. This year, we expect that crude oil price will go down to USD 85, USD 95 per barrel and also a decrease in the refining margins to around USD 11 per barrel because the fuel markets will go back to their equilibrium, which will be driven by a slowdown in economic activity in the global scale as well as the gradual increase in supply because new refineries will be brought on stream.
And the differential in 2023 is expected to fall to around USD 5 a barrel as a result of a major reduction of throughputs REBCO. Petrochemical margin is expected to decrease as well to around EUR 1,100 per tonne as a result of a drop in demand and high inflation. Natural gas prices will go down or expected to go down to around PLN 200 per megawatt hour. However, gas prices in the coming quarters will depend largely on weather conditions as well as geopolitical risks.
We're also expecting a drop in electricity prices year-on-year to around PLN 450 per megawatt hour, mainly on the back of higher reserves as well as lower prices of CO2 emission allowances as well as gas prices and consequently, the decrease in the prices of electricity. In terms of GDP and the outlook for our major markets, these are not very positive.
We are expecting a drop in demand for all our products on the back of the economic slowdown. Other important matters here and regulations, which impacts our business, obviously. We need to mention about the -- above-mentioned EU embargo on fuel imports from Russia, which came in at -- in effect on the 5th of February 2023. As a reminder, the ORLEN Group was faster than the Embargo. So practically speaking, ever since the Russian aggression in Ukraine, we have not imported any gas from Russia. Another important issue here is an act on special protection of certain customers consuming gaps. This matter will have a major impact on the performance of PKN ORLEN in the gas segment. Thank you very much for your attention. That will be all for today. And now we can ask you to ask your questions.
So we're moving on traditionally to the Q&A session. We have received a number of questions from Mr. [indiscernible] when will you officially take over fuel stations from mall in Czech Republic and Slovakia? And when will -- you will have first mall station opened in Hungary.
We are meeting all our obligations and requirements both in terms of the European commissions' requirements, which is related to both the remedies and M&A processes. In the beginning of December 2022, we took over 79 fuel stations in Hungary, which were rebranded. So the rebranding process is already underway. We want to adjust them to our standards and our requirement and our standards on fuel stations as you can clearly see when you travel all around Europe, our standards are high, and we want to have those standards across all our markets, not only Poland.
We will take over 143 stations in Hungary and 39 stations in Slovakia. And those acquisitions and the rebranding processes is, as I said, under way, and it will continue this year until mid-year. So we will close those processes at that point. So this is another proof that we are witnessing a historical situation here. Who would have thought dozen years ago or a couple of years ago that PKN ORLEN as a specifically Polish company, we'll be of not only the largest such cooperation in the CEE region, but it will also secure or guarantee energy security, not only in Poland, but also in other CEE countries. We are very proud about that. We do believe that this is something we have achieved in partnership with the Polish government and the partnership between the Polish government and state-owned company that PKN ORLEN essentially is and everybody -- all the players, major players across those markets needs to take that into account.
Another question from [indiscernible] the lack of the licenses for new areas for the construction of new wind farms. How will affect your future plans in terms of this particular segment of your operations.
Since the very beginning of this process, we have declared our interest in acquiring all 11 licenses -- location licenses. Right now, we have a decision in terms of 5 of 11 those licenses. We're still awaiting the decisions and other areas. But we do not change our plans in terms of the growth of our operations in this particular area, wind farms. We want to enhance our competencies in this particular area in terms of highly qualified personnel and the building of the border terminal, insulation terminal, [indiscernible] as well.
But essentially, the answer to that question is as follows. We do not change our plans. We are waiting for the results of other processes in terms of licensing. When we took part on those processes, we were well aware of the fact that this is a competition-based process, and it's very competitive, and we might not be selective as the winning better here for all those locations. But yes, we will wait for the final decisions here.
We have a question on reactors from [indiscernible]. What's the stage of this process, currently in terms of SMRs? When will we see the first reactor brought on stream and when will we see specific investments in this area?
The ORLEN Group is a modern group that is well ahead of the current market situation. So we are well advanced here in terms of the preparations we have taken in order to implement this technology, SMR technology. And we have the exclusivity right here in terms of the use of [ BWRX 300 ] and we have partnered with major partners here. I'm talking about American companies. That is General Electric, Hitachi Nuclear Energy. This is the most advanced SMR technology in the world. And we can say that at this point, it's being commercialized already in Canada.
And our company that deals with this process -- that oversees this process, in partnership with centers, we have set up a partnership ORLEN Synthos Green Energy. And already in July, we applied to the National Atomic Agency for an opinion on this particular BWRX 300 technology in order to secure a clearance to launch the construction of such a unit. We do believe that we will receive that clearance shortly and technical documentation was based on state-of-the-art American solutions. This is a safe technology and we need to remember that we will follow the steps or follow suit. We will join both American and Canadian company. So our choice of a partner is absolutely not an accident.
This is a major partner, and our corporation is very, very successful. And we do believe that this decision was a good one. As you can see, state-of-the-art technologies are taken into account. In addition to SMRs, we are also developing our -- both synthetic fuel solutions as well as hydrogen solutions. So we are well advanced in terms of our vision for the future, and we are aware of the fact that we will need to have transformation -- energy transformation, low-emission solutions, and PKN ORLEN is an indispensable element of this particular transformation, both in Poland and across Europe.
Another question from [indiscernible] What is the stage of the process in terms of the building of the olefins unit -- olefins 3 units?
Let me first say that the investment -- we decided to deliver in construction of the olefin 3 units at Plock, is the largest petrochemical investment in our region of -- our region in Europe for the past 20 years. This is a key project for the future growth of our company. And we need to remember about the demand for petrochemicals. This is one of the pillars of the process under which we will build a strong multi-utility business.
After we have delivered those investments, they will have a major effect, not only on the situation in the petrochemical market, but also our standing in general, but also a major effect -- positive effect for Plock in terms of the labor market. So we will have -- or will have new work -- we'll have a lot of new work for both the inhabitants of Plock and the area around Plock and we will also inject additional money around PLN 160 million per year to the [ state ] budget.
Coming back to your question, what is the current stage of the process. We have already secured the clearance work on the future complex is already underway. We're talking about the first installation works, assembly works. We are building a container town, and it will accept around 160% of new employees. We will have -- in the peak period, we'll have about 10,000 employees working in the area, and those employees will come from all around the world because we're not talking about only our employees, but also the employees of our subcontractors.
This will be a huge number of people, which is obviously adequate to the scale of the investment. We have received Shanghai, China, the first very heavy elements that will be used in the construction process to build that complex, olefin 3 unit. So this investment, as I said before, is progressing as planned.
Just a side note from Mr. Szewczak. At the end, I'd like to throw an additional comment here. You can ask a question, how is it possible in the period, such a difficult period or the war in Ukraine raging just outside our borders, high prices of feedstocks, ranging prices of feedstocks. How is it possible that you are able to invest around PLN 20 billion in such a difficult year and also report very robust profit levels and EBITDA levels. How is it possible that we will launch new work on new technologies and also support the market and clients, consumers are large, driving down certain prices, for instance, of diesel oil or paying PLN 14 million to support the gas market.
How is it possible? This has been possible not only due to the very consistent -- decision is taken by our management -- professional management in general. But also, you have to remember about that -- what also -- this was due to the legislative measures and all the other efforts taken by the Polish government, the -- those decisions resulted in the elimination of the fuel mafia and we were able to control that situation. And this means that this market is under control of Polish government and also the Polish consumers and Poland companies such as PKN ORLEN. And you can see that in the market. There is fuel in the market, and there's stability in the market. And this was, as I said, due to the concern and the focus on the Polish interest, economic interest.
Last question which was posed by a couple of our viewers. What is the expected dividend for 2022?
You have to be patient and wait for more days -- couple of days. On 29th of February, we will have the announcement of our new strategy. Mr. Obajtek will inform you about the dividend policy, but our declarations are -- remain stable and our dividend policy will remain stable. And for the details, you have to wait for a couple of more days. Thank you very much for this presentation and all your other answers will be answered by the press office. Thank you very much for your participation in this conference call. Thank you. My fellow speakers, thank you, and we will be here next time. Thank you very much. Goodbye.
[Statements in English on this transcript were spoken by an interpreter present on the live call.]