Turkey's Petkim has its profits hit by rising cost of oil

05 March 2012 14:51  [Source: ICIS news]

LONDON (ICIS)--Petkim's profits in 2011 were badly hit by higher feedstock costs, particularly the rising price of oil, the Turkish petrochemical producer said on Monday.

The group's net profit in 2011 fell 21% year on year to Turkish lira (TL) 102m ($57.6m, €43.8m) despite sales revenues increasing 34% to TL 3.9bn and operating profit climbing 28% to TL 163m, Petkim added.

Company management was pleased with the export performance during the year, with export sales revenues rising to an all-time high of TL 825m compared with TL 531m in 2010, the firm said.

Despite the market constraints produced by ongoing international economic difficulties, Petkim saw huge potential for building up its revenues both abroad and at home from the output that should flow from its $10bn petrochemical “supersite” investment.

However, Erste Group Bank said it was lowering its Petkim forecasts for 2012 and 2013 quite substantially due to the weak underlying profitability seen from the firm in 2011.

“Our 2012 forecast [for net profit of TL 143m] may appear conservative but if Petkim's 2011 performance is stripped of [one-off] gains, it is evident that even our projection will not be easily attained and that it will take a good year for Petkim to reach those estimates,” said Erste analyst Thomas Unger.

“We have been pessimistic about Petkim’s future profitability for quite some time, warning that naphtha-based producers will continue to struggle as long as oil prices remain at elevated levels,” he added.

($1 = TL 1.77, €1 = TL 2.33)

By: Will Conroy
+44 20 8652 3214

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