09 November 2006 10:42 [Source: ICIS news]
PRAGUE (ICIS news)--Margin increases drove a 49.6% improvement in the petrochemicals operating profit of PKN Orlen in the third quarter, the Polish oil and petrochemicals group said on Thursday.
Orlen said the proportion of the segment’s Zloty211.1m ($70.5m/€55.1m) result that could be attributed to the better margins’ impact was Zloty69m, when compared to July-September of last year.
Petrochemicals revenues climbed 110.5% to Zloty3.9bn, with sales to third parties leaping 71.4% to 833,000 tonnes.
Margins for these products, he said, rose by 40.4%, 88.5%, 56.7%, 18.8%, 26.0% and 21.7%, respectively, while a negative margin of $57/tonne compared to Q3 2005’s $135/tonne was recorded for glycols.
“Such high increases in sales were a consequence of the repair shutdown of the new Olefin II installation in the third quarter of 2005,” Orlen noted.
It also highlighted a Zloty20m improvement to Zloty41m in the quarterly operating profit of the Basell Orlen Polyolefins joint venture subsidiary and overall production increases of 91,000 tonnes for ethylene and 62,000 tonnes for propylene thanks to the start-up of the Olefin II installation.
For chemicals, Orlen reported an operating profit of Zloty56.7m in contrast to Q3 2005’s loss of Zloty51.8m. Revenue was up 19.5% to Zloty663.5m.
KBC Securities said the combined petrochemicals and chemicals results came in 22.7% below its forecast, mostly because of the Zloty70m negative impact of lagging pricing policies for naphtha. These did not allow Orlen to take full advantage of falling naphtha costs.
Improvements in sales volumes included 15.8% for polyvinyl chloride (PVC) and 441.7% for soda lye.
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Increased demand for fertilisers in anticipation of rising prices also benefitted the chemicals business, added Orlen.
It said the better performance included a Zloty42m improvement in the operating profit of PVC and fertilisers subsidiary Anwil, taking it to Zloty59m.
Orlen’s overall operating profit rose 8.1% to Zloty1.2bn, with sales revenues up 12.2% to Zloty14.9bn. Net profit edged up 4.3% to Zloty1.04bn.
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