PKN Orlen petchem division more than doubles profit to €36m

29 October 2010 08:46  [Source: ICIS news]

PRAGUE (ICIS)--PKN Orlen's petrochemicals division saw its third-quarter operating profit more than double year on year to zloty (Zl) 142m ($49.8m, €35.8m), partly on improving margins, the Polish group said on Friday.

Petrochemical revenues edged up 2.6% to Zl 3.5bn, while petrochemical sales volumes increased by 7.6% to 1.21m tonnes, it added.

“The impact of macroeconomic factors connected with the increase of petrochemical margins together with changes in foreign exchange rates increased the segment’s result from operations by Zl 82m year on year,” Orlen said.

Negative factors, it added, included petrochemical product inventory valuation changes, which decreased profit from operations by Zl 43m.

Orlen's model petrochemical margin for the third quarter was €753/tonne, compared with €601/tonne in the same quarter of last year and €721/tonne in the second quarter of this year.

Comparing the third quarter of this year with the same period of last year, the largest margin fall was a 10.7% decline for polyethylene (PE) to €200/tonne, while the largest rise was a near-fourfold increase for butadiene to €1,018/tonne. Polypropylene (PP) saw a 44.6% rise to €402/tonne.

Orlen said it noted stable sales growth of olefins and polyolefins and higher demand for fertilizers, with sales volumes of its Canwil nitrogen fertilizer more than doubling to 122,000 tonnes.

However, it continued to experience lower sales of polyvinyl chloride (PVC) as a consequence of an incident that put the electrolysis apparatus of the chlorine and lye plant at subsidiary Anwil out of action in June. Year on year, the third-quarter PVC sales volume was down 20.4% to 74,000 tonnes, with the PVC granulate sales volume declining by 22.2% to 14,000 tonnes.

Orlen also reported an overall third-quarter net profit of Zl 1.24bn, a 33.8% improvement year on year achieved thanks to a stronger zloty, which cut the group's financial costs. Sales revenues were up 18.5% to Zl 22.1bn.

($1 = Zl 2.85, €1 = Zl 3.97)

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By: Will Conroy
+44 20 8652 3214



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