Poland's Synthos can look forward to profitability in 2014 - analyst

04 October 2013 15:58  [Source: ICIS news]

LONDON (ICIS)--Poland's major synthetic rubber producer Synthos can look forward to a rebound in profitability in 2014 as the European economic recovery reflects in stronger orders for its products from the automotive and construction industries, an equities house said on Friday.

“We forecast Synthos' net profit will improve 78% year on year in 2014 due to higher earnings in the rubber and styrenics segments,” the equities house of Poland's BPS bank said in a note to investors, concluding that the consensus among analysts on the outlook for Synthos was too pessimistic.

The company was well placed to benefit from renewed economic growth in Europe thanks to heavy investment in high-grade synthetic rubber production, it added.

In its own analysis of Synthos' prospects, Erste Group Bank said the rubber market showed the first signs of recovery during September following abrupt falls in styrene butadiene rubber (SBR) and benzene prices.

“Recovering rubber margins should support the Synthos [stock] valuation,” the bank said.

However, analyst Dominik Niszcz at Raiffeisen Centrobank (RCB) said it was premature to say there was any kind of demand-driven rubber market recovery in Europe.

“Rather, we are still waiting for this to happen next year,” Niszcz said.

“Currently we have a rebounding butadiene [BD] price in Asia and a small rebound in Europe, but it is still too early to say there is a longlasting recovery in rubber margins,” he added.

By: Will Conroy
+44 20 8652 3214

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