Poland's PKN Orlen sees higher Q3 petchem profit on wider margins

23 October 2013 09:39  [Source: ICIS news]

LONDON (ICIS)--Poland's PKN Orlen saw third-quarter operating profit for its petrochemical division move up by 17.4% year on year to zloty (Zl) 250m ($82m) on wider margins, the oil refiner said on Wednesday.

Sales revenue for petrochemicals rose by 6.4% to Zl4.8bn, while sales volumes fell by 5.9% to Zl1.3bn, largely because of unscheduled shutdowns at Czech subsidiary Unipetrol, Orlen added. 

The refiner’s model petrochemical margin improved to €719/tonne ($989/tonne) in the third quarter of 2013 compared with €625/tonne in the same period last year, though it trailed the €729/tonne made in the second quarter of this year.

However, its third-quarter butadiene (BD) price plunged by 77.0% year on year to €203/tonne, while toluene prices dropped by 25.3% year on year to €195/tonne.

Orlen’s third-quarter fertilizer sales volumes were down by 41.9% from the previous year to 244,000 tonnes, because of issues at its fertilizer production units, according to its statement.

There was an emergency shutdown of ammonia output at its subsidiary Anwil in August, while fertilizer production at Unipetrol was permanently ceased in end-2012. Production at its subsidiary Spolana was also halted after a flood in the Czech Republic in June, Orlen said in the statement. 

However, Orlen’s sales volume of purified terephthalic acid (PTA) hit a record high in the third quarter, rising to 146,000 tonnes from 134,000 tonnes in the preceding quarter. PTA sales volume in the third quarter of 2012 was 115,000 tonnes.

Nonetheless, Orlen saw overall third-quarter net profit drop to Zl652m from Zl1.4bn a year ago, because of a sharp fall in its refining margin. Meanwhile, total sales revenues edged down by 4.0% to Zl30.4bn.

Its CEO Jacek Krawiec has described the refiner’s third-quarter financial performance as “stable despite severe macroeconomic pressures”.

“We have repeatedly stressed that our priority is to maintain financial health,” Orlen’s CFO Slawomir Jedrzejczyk said.

Jedrzejczyk also noted that Fitch Ratings has recently returned the company to investment-grade territory in its ratings after four years.

($1 = Zl3.04)
($1 = €0.73)

By: Will Conroy
+44 20 8652 3214

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