26 July 2012 10:46 [Source: ICIS news]
LONDON (ICIS)--Unipetrol recorded a petrochemical operating loss of koruna (Kc) 80m ($3.81m, €3.14m) in the second quarter of 2012, against an operating profit of Kc465m at the same time a year ago, with polyolefin market demand diminished by customers holding out for lower prices, the Czech company said on Thursday.
Petrochemical sales revenues edged down by 1% year on year to Kc8.6bn, while petrochemical sales volumes fell by 8% to 411,000 tonnes, it added.
Market demand for petrochemical products weakened during the second quarter, partly because “customers were destocking while expecting a sharp correction of crude oil prices and petchem derivatives quotations,” Unipetrol said in a commentary on its results.
“This marked correction finally materialised during the course of the second quarter, and that is why we started to feel a revival of market demand at the beginning of the third quarter,” the company added.
Year on year, Unipetrol's second-quarter model polyolefin margin fell to €217/tonne ($265/tonne) from €288/tonne, while its model olefin margin rose to €400/tonne from €353/tonne.
Looking at Unipetrol’s overall second-quarter Kc598m net loss, which compared to a net loss of Kc361m a year ago, Robert Rethy, an analyst at investment bank Wood & Company, noted that “the very ugly reported losses appear to hide a fairly decent underlying performance in [second quarter 2012], close to our original expectations.”
Unipetrol stated that “its inventory holding losses for the second quarter amounted to Kc1.2bn, thus, the underlying LIFO [last-in first-out] or CCS [current cost of supplies] EBIT [earnings before interest and tax] was positive at Kc754m, and stronger than our estimate” he added.
Second-quarter overall sales revenues at Unipetrol were Kc27.1bn, compared to Kc25.9bn a year earlier.
Unipetrol is 63%-owned by Polish oil and petrochemicals group PKN Orlen, which reported its second-quarter results earlier on Thursday.
($1 = €0.82)
($1 = Kc20.97, €1 = Kc25.50)
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