Weak chems eroding ferts profits at Grupa Azoty: bank

01 August 2013 16:02  [Source: ICIS news]

LONDON (ICIS)--Poland's Grupa Azoty is seeing much of its fertilizer profitability offset by continued losses from its major chemical products, an investment bank said on Thursday.

Weak demand has taken a second-quarter toll on the group's caprolactam (capro), polyamide 6 (nylon 6) and titanium dioxide (TiO2) businesses, according to WOOD & Company.

The oxo-alcohols business, run by group subsidiary Zaklady Azotowe Kedzierzyn (ZAK),  has meanwhile suffered a production stoppage, and bearish sentiment.

“We expect [largest Polish nitrogen fertilizer producer and Grupa Azoty subsidiary] Zaklady Azotowe Pulawy to be the key contributor to Grupa Azoty’s earnings in Q2 [the second quarter] as the losses on chemical products at Tarnow and ZAK are likely to erase, to a large extent, the earnings in the fertiliser segment,” said Piotr Drozd, a chemical industry analyst at WOOD & Company.

The second quarter also saw ZAP's melamine division make a margin recovery on the back of tight supply conditions, he also noted.

The bank forecast Grupa Azoty would achieve a 16% year on year improvement in second-quarter net profit to zloty (Zl) 103.6m ($32.5m, €24.4m), but noted that this would be driven by the consolidation of ZAP, which was taken over by the group in the first quarter.

Grupa Azoty is scheduled to report its second-quarter earnings on 30 August.

($1 = Zl 0.75, $1 = Zl 3.19, €1 = Zl 4.25)


By: Will Conroy
+44 20 8652 3214



AddThis Social Bookmark Button

For the latest chemical news, data and analysis that directly impacts your business sign up for a free trial to ICIS news - the breaking online news service for the global chemical industry.

Get the facts and analysis behind the headlines from our market leading weekly magazine: sign up to a free trial to ICIS Chemical Business.

Printer Friendly

ICIS news FREE TRIAL
Get access to breaking chemical news as it happens.
ICIS Global Petrochemical Index (IPEX)
ICIS Global Petrochemical Index (IPEX). Download the free tabular data and a chart of the historical index