Poland’s ZChP unlikely to post net profit in ’08 - bank

03 February 2009 17:10  [Source: ICIS news]

PRAGUE (ICIS news)--Growing losses are threatening the likelihood that Zaklady Chemiczne Police (ZChP) will post a net profit for 2008, an investment bank said on Tuesday.

The bank’s assessment was prompted by ZChP’s announcement that it expected losses from its open currency hedging bets to reduce its 2008 earnings by zloty (Zl) 124.8m ($35.7m, €27.8m) – equivalent to 38% of the company's market capitalisation – Wood & Co analyst Barbara Zaleska said.

That compared with figure of Zl72m that ZChP was anticipating in currency hedging losses in December.

“With foreign exchange losses growing, the [forecast] fourth-quarter operating loss and the announced December inventory write-down of Zl150m, ZChP's 2008 net result may shrink from Zl340m after three quarters to a negative number, especially since the company may be also pushed to write down the value of its fixed assets,” said Zaleska.

“The stock has lost 83% from its peak.... and we maintain our negative view,” she said.

ZChP is Poland's second-largest fertilizer producer and also makes titanium dioxide (TiO2).

($1 = Zl3.50, €1 = Zl4.48)

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By: Will Conroy
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