11 December 2012 15:45 [Source: ICIS news]
LONDON (ICIS)--Poland's Ciech can expect a 4-5% hike in yearly contract prices for soda ash in 2013, Raiffeisen Centrobank said on Tuesday.
“We expect that an increase of the soda ash price by 4-5% is likely given growing spot prices globally, while the margin should be at least maintained year on year as higher costs related to CO2 permits will be offset by cheaper anthracite/coke input,” an analyst at the bank, Dominik Niszcz, said in an analysis of the prospects for the soda ash producer.
“While thermal coal prices supplied from KW [Poland's Kompania Weglowa coal producer] depend on inflation, the contract with KW expires in 2013 and savings will be [even] more pronounced in 2014,” he added.
Austria-based Raiffeisen's current rating of Ciech's stock as a 'Buy' also partly stemmed from the likelihood that an ongoing restructuring and reorganisation of the company's management structure may trigger substantial savings of administrative and selling costs, Niszcz said.
“The meaningful earnings impact will be felt already in 2013, especially in the second half of the year, while inflated financial costs will burden the Q4/2012 [fourth- quarter 2012] results,” he said.
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