Ammonia sales crash adds to ferts, TiO2 woes of Poland's ZChP - bank

22 March 2013 16:27  [Source: ICIS news]

LONDON (ICIS)--Poland's Zaklady Chemiczne Police (ZChP) has suffered a crash in ammonia sales volumes, adding to its difficulties in the poor multi-component fertilizer and titanium dioxide (TiO2) markets, an investment bank said on Friday.

Maintenance shutdowns of ZChP's urea-ammonia line were a key factor as the company's fourth-quarter 2012 ammonia sales volumes fell 81% year on year and 72% quarter on quarter, according to Prague-based WOOD & Company.

Year on year, multi-component fertilizer sales declined 31% and urea volumes eased 14%, it added.

The bank also noted that one-offs in ZChP's fourth-quarter results “masked the scale of the downturn”.

“While ZChP's reported EBIT [earnings before interest and tax] and net profit in Q4 reached minus zloty (Zl) 1.8m [$0.6m, €0.4m] and Zl 0.6m, respectively, we note that stripping out the positive asset revaluation in Q4 (+ Zl 47.092m), adjusted EBIT and net profit amounted to minus Zl 48.9m and minus Zl 46.5m, respectively,” Piotr Drozd, a chemical industry analyst at the bank, said.

ZChP's EBIT and net profit in the fourth quarter of 2011 were Zl 79.9m and Zl 150.1m, respectively.

The company's TiO2 business, struggling on a European market that is expecting little growth this year, saw its fourth-quarter EBIT decline to a loss of Zl 8.9m from a profit of Zl 46.1m in the same period of the previous year, WOOD & Company said.

ZChP is a subsidiary of largest Polish chemical group Zaklady Azoty Tarnow (ZAT).

Both companies have switched to using the name Grupa Azoty for marketing purposes, in advance of formalising a group of that name that is being created in a merger and consolidation process.

($1 = €0.77, $1 = Zl 3.24, €1 = Zl 4.19)

By: Will Conroy
+44 20 8652 3214

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