Polish ZAP’s net profit tumbles on chemical margins pressure

14 November 2012 14:11  [Source: ICIS news]

LONDON (ICIS)--Zaklady Azotowe Pulawy (ZAP) saw a net profit of zlotych (Zl) 35m ($10.6m, €8.4m) in the first quarter of its 2012/13 fiscal year, from July to September 2012, compared with Zl 99.5m in the same period the year before, with its chemicals segment suffering pressure on margins, the Polish company said on Wednesday.

Sales revenues rose to Zl 878m from Zl 821m, while operating profit fell to Zl 37m from Zl 112.3m, it added.

During the quarter, the company’s chemical division suffered a 50% year-on-year decline in caprolactam (capro) commodity margins over benzene costs, ZAP said.

Melamine commodity spreads over urea plummeted 84% year on year, it added.

“The key reason for the earnings miss was the chemicals segment,” Prague-based investment bank WOOD & Company, which had forecast that net profit would be 8% higher, said in an analysis of ZAP’s result.

Year on year, ZAP’s capro output declined 6.2%, but nitrogen fertilizer output increased 32%, multi-component fertilizer production rose 16.8%, melamine output grew 7.4% and AdBlue production by 8.6%, it said.

($1 = Zl 3.29, €1 = Zl 4.18)

By: Will Conroy
+44 20 8652 3214

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