PKN Orlen hit by ferts market, gets Basell JV boost

29 February 2008 11:53  [Source: ICIS news]

PRAGUE (ICIS news)--Increasing competition from companies based in countries east of Poland was cutting into PKN Orlen's nitrogen fertilizer profits, the Polish producer said on Friday.

Sales of ammonium nitrate products - largely through subsidiary Anwil - were down 4.3% to zloty (Zl) 97m (€28m/$42m) and volumes declined 6.9% to 135,000 tonnes in the fourth quarter of last year compared with the same quarter of 2006, it said, as competition led to lower fertilizer sales into Germany.

Year-on-year sales of its Canwil nitrogen fertilizer edged up 4.7% to 90,000 tonnes but in terms of revenue they were down 2% to Zl50m.

Orlen, which earlier posted fourth-quarter operating profits of Zl120m, also noted “a satisfying level” of profit at the Basell Orlen Polyolefins 50:50 joint venture at Plock.

The JV's operating profit stood at Zl55m in the fourth quarter of 2007, compared with Zl17m in the same period of 2006, with an Orlen spokesman saying this was “attributable to high sales volumes of polyolefins, which reached nearly 93,000 tonnes”.

Overall its chemical business segment increased quarterly operating profit by Zl22m to Zl246m, the spokesman said, driven by firm polyvinyl chloride (PVC) sales up 3.4% to Zl211m.

However, he added, there had been a 26.4% decline in sales of PVC granulate due to “an increase in granulate imports to Poland and high stocks at processing plants”.

Orlen also recorded an 81.5% drop in sales of caustic soda to 34,000 tonnes “due to a slowdown of caustic soda exports (high prices) and customer expectations of price reductions” from the start of the year.

($1 = Zl2.33/€1 = Zl3.53)

By: Will Conroy
+44 20 8652 3214

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