Poland’s Orlen records Zl142m petchem operating profit fall in Q2

26 July 2012 09:20  [Source: ICIS news]

LONDON (ICIS)--Petrochemical operating profit at PKN Orlen fell to zlotych (Zl) 379m ($110m, €91m) in the second quarter from Zl521m a year ago, with lower prices leading to an inventory revaluation loss of Zl142m, the Polish chemical manufacturer said on Thursday.

Sales volumes of petrochemical products edged down by 2.9% year on year to 1.21m tonnes, with plastics, polymer and fertilizer volumes falling by 8%, 3.1% and 7.1%, respectively, Orlen added.

“The lower sales volumes resulted mainly from market expectations of falling prices because of decreasing crude oil prices,” the company said.

The second quarter saw Orlen's model petrochemical margin drop by €23/tonne ($28/tonne) from a year ago to €772/tonne, with the company forecasting an acceleration of the fall during the third quarter to €539/tonne.

Orlen's petrochemical division also took a Zl62m charge from a lack of compensation revenues, partly related to a fire at Polish polyvinyl chloride (PVC) and nitrogen fertilizer subsidiary Anwil which occurred a year ago, it added.

Fixed asset impairment charges at Anwil and Czech petrochemical and refining subsidiary Unipetrol lowered the division's operating result by Zl49m.

However, exchange rate gains on purified terephthalic acid (PTA) and other petrochemical sales pushed up the result by Zl13m, it said.

Overall, Orlen – also a refiner – posted a net loss for the second quarter of Zl5m against the net profit of Zl899m achieved in the same quarter of 2011, with Lithuanian refining subsidiary Orlen Lietuva suffering a second-quarter operating loss of Zl269m after a longer than expected period of maintenance.

Net sales revenues rose by 9% year on year to Zl27.8bn.

($1 = €0.82)
($1 = Zl3.44, €1 = Zl4.18)

By: Will Conroy
+44 20 8652 3214

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