Petchem operating profit at Poland's Orlen falls to Zl 323m

23 July 2013 10:34  [Source: ICIS news]

LONDON (ICIS)--PKN Orlen's petrochemical second quarter operating profit fell to zloty (Zl) 323m ($101m, €77m) from Zl 379m in the same period a year ago on lower margins, the Polish group said on Tuesday.

Petrochemical sales revenues for the second quarter edged down to Zl 4.7bn from Zl 4.8bn a year ago, with petrochemical sales volumes flat at 1.2m tonnes, Orlen added.Orlen's second quarter model petrochemical margin was €729/tonne, compared to €772/tonne in the same three months of 2012, the company said.

“The positive impact of sales volumes in the second quarter of 2013 amounted to Zl 57m year on year and mainly related to higher sales of polyolefins, plastics and PTA [purified terephthalic acid] accompanied by a lower volume of fertilizers as the result of the production standstill at [subsidiary] Spolana in the Czech Republic due to the June floods and the ceasing of fertilizer production of the [Czech subsidiary] Unipetrol group at the end of 2012,” Orlen said in a commentary on its financial results. 

In a note to investors on Orlen's results, Robert Rethy, an analyst at Prague-based investment bank WOOD & Company said: “We see the Q2 earnings as disappointing, missing rather modest expectations and bringing in poor operating earnings in all segments [except retail]... This is particularly concerning because the operating environment was not hostile, although clearly not as supportive as a year ago, and volumes were also reasonable.”

Among year-on-year petrochemical price falls which hit Orlen during the second quarter was a 49.1% decline in the price of butadiene to €713/tonne from €1,402/tonne a year ago, according to Orlen.

Overall, PKN Orlen saw a second quarter net loss of Zl 229m, against a net loss of Zl 40m in the same period of 2012, with sales revenues almost exactly flat at Zl 28bn.

The company's refining business experienced a margin squeeze, Orlen said.

($1 = €0.76, $1 = Zl 3.19, €1 = Zl 4.21)

By: Will Conroy
+44 20 8652 3214

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