Poland's ZChP faces 29% fall in 2013 net profit - bank

14 March 2013 12:09  [Source: ICIS news]

LONDON (ICIS)--Polish multi-component fertilizer and titanium dioxide (TiO2) producer Zaklady Chemiczne Police (ZChP) can expect a 29% year on year deterioration in its net profit for 2013, an investment bank said on Thursday.

Given the weak market outlook for both the company’s fertilizers and TiO2, ZChP should expect this year’s net profit to fall to zloty (Zl) 78m ($24.5m, €18.8m) from Zl 110m in 2012, with sales revenues flat at Zl 3.0 bn, the bank, Prague-based WOOD & Company, estimated.

“Against our forecasts of a significant deterioration in earnings in 2013… we continue to perceive ZChP as a fundamental ‘Sell’ with the market’s expectations regarding [parent group] Zaklady Azoty Tarnow’s [ZAT’s] tender for the 33% minority stake in ZChP as the only positive stock driver,” Piotr Drozd, a chemical industry analyst at the bank, said.

ZChP was this year set to face flat to declining multi-component fertilizer demand, along with a 5% increase in global capacity in the fertilizer capacity, the bank noted.

In regard to ZChP’s TiO2 prospects, on 8 March, Jim Fisher, co-chair of the Titanium Dioxide World Summit 2013, told ICIS that little growth was expected in European TiO2 this year.

Both ZChP, based in Police in the far northwestern corner of Poland, and ZAT have started trading under the brand name Grupa Azoty, the name of the group to be formed from an ongoing merger and consolidation process centred on ZAT.

($1 = €0.77)
($1 = Zl 3.19, €1 = Zl 4.14)

By: Will Conroy
+44 20 8652 3214

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