Zaklady Chemiczne Police swings to Q4 net profit of Zl 46.9m

17 February 2011 13:55  [Source: ICIS news]

PRAGUE (ICIS)--Zaklady Chemiczne Police (ZChP) has recorded its first substantial net profit in two years, the Poland-based fertilizer and titanium dioxide (TiO2) producer said on Thursday.

ZChP reported a fourth-quarter 2010 net profit of zloty (Zl) 46.9m ($16.3m, €12.0m), compared with a net loss of Zl 100.1m in the same period in 2009, while net revenues rose 41% year on year to Zl 573.5m.

Since the first quarter of 2009, when ZChP posted a net loss of Zl 174.7m, the company has produced consecutive quarterly net losses, apart from the third quarter of 2010, when it managed a small net profit of Zl 1.2m, the company noted.

“I am convinced increased production efficiency, a clear development plan and the repair of the finances has put ZChP on the path to growth…but the main problem to deal with remains the company’s high debt,” said ZChP CEO Krzysztof Jalosinski.

ZChP, which is carrying out a recovery plan with public loans, was buoyed by much higher sales in the fourth quarter.

Its fertilizers business reported sales growth of 44% year on year to Zl 500m, which was a result of higher fertilizer prices and solid demand. The average sale price grew 34% to Zl 1,300/tonne, it said.

The company’s TiO2 segment delivered 25% growth in sales to Zl 66m, with sold volumes up 7% to 8,900 tonnes and prices up 16%, the company added.

ZChP said that its net debt currently stood at Zl 227m. Poland’s PKO BP bank this week extended ZChP’s repayment deadline on a Zl 82m loan to 31 December 2012.

This followed a similar move from Pekao bank in January, while efforts continued to reach a repayment agreement on debts owed to the Polish gas monopoly PGNiG, it said.

Investment bank Wood & Company said ZChP’s fourth-quarter net profit was double its estimate, but noted that a significant proportion of the gains came from the unexpected booking of deferred tax assets.

($1 = Zl 2.88, €1 = Zl 3.91)

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By: Will Conroy
+44 20 8652 3214

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