Unipetrol expects Q3 profit, analyst warns on underlying ops

19 October 2012 10:18  [Source: ICIS news]

LONDON (ICIS)--Unipetrol expects to record a third-quarter operating profit of around koruna (Kc) 200m ($10.5m, €8.1m) after more than a year of quarterly losses, the Czech refining and petrochemical company said in a trading update on Friday.

However, in a note to investors, Prague-based investment bank WOOD & Company claimed that the profit “would include inventory holding gains, as well as a Kc200m one-off gain, thus implying that the underlying operations remained in the red, despite decent volumes across the board”.

In its trading statement, Unipetrol said that “the main factors that influenced the quarter-on-quarter performance of the petrochemical segment in the third quarter were a lower model olefin margin as a result of lower spreads of ethylene and propylene to naphtha, though this was partly [negatively] compensated by a higher model polyolefin margin due to higher spreads of polyethylene to ethylene and polyproplylene to propylene”.

Unipetrol also forecast improved petrochemical sales volumes of 466,000 tonnes for the quarter - up 21% year on year and 13% quarter on quarter - which the company attributed to "stable and reliable production, customers’ restocking predominantly during the first half of the quarter and production outages of several competitors”.

“Macro dynamics in the core markets [were] still rather weak, however,” Unipetrol added.

Unipetrol's model polyolefin margin for the third quarter was completely flat year on year and 16% up quarter on quarter at €251/tonne.

The company's model olefin margin improved 4% year on year but worsened 24% month on month   to €303/tonne.

Unipetrol is 63%-owned by Polish oil and petrochemicals group PKN Orlen.

Both companies are scheduled to report their third-quarter financial results on 25 October.

($1 = €0.77)

($1 =Kc18.97, €1=Kc24.78)

By: Will Conroy
+44 20 8652 3214

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