Prague, 13 May 2010 – Unipetrol Group returned to profitability in 1Q/2010. After implementation of a number of cost-saving and optimizing measures at the beginning of last year, Unipetrol is back in the black on both operating and net levels. The successfully launched optimization plan and previous investments (in refineries and PP production) also enabled the product portfolio to be altered to meet the changing demand of a weaker market. Overheads and other costs were significantly reduced y/y, especially in the refinery segment.
External conditions improved slightly y/y, but they have not yet reached the pre-crisis level (i.e. Q1/2008); and for this reason partially off-set cost savings and improvement of operational efficiency results. Despite unfavourable macro environment, positive financial results were achieved in all segments of the Unipetrol business.
Operational profit (EBIT) for the whole company amounted CZK + 517 m. The net profit was CZK + 309 m compared to a loss of CZK – 185 m in the same period of last year. The 1Q/2010 net profit was the first positive result after five quarters in a row. Revenues rose 24 % y/y up to CZK 18 bn.
The refinery segment returned to profit (with EBIT CZK + 279 m) after five consecutive quarters. Petrochemical and refinery product cracks increased, but they still remained lower than before the global economic slowdown. Ongoing weak demand for fuels was also the main reason for the 7 % y/y decline in throughput of crude oil and weaker volume sales of refinery products.
Retail performed very well. In spite of the complicated development on the market, affected by the severe winter and lower demand for non premium fuels, Benzina strengthened its position on the market. Verva premium fuels sales improved 49 % compared to 1Q/2009 and Benzina´s EBIT was 130 % higher.
Commentary by segments:
The y/y performance of the refining segment improved significantly. The EBIT CZK + 279 was the first positive result since 3Q/2008. Unipetrol achieved this partly thanks to better refining margins and the Brent-Ural differential as well as improved profitability especially in gasoline production. The effects of ongoing cost cutting measures and the inventory effect also contributed positively. The y/y lower crude oil throughput and lower sales volumes due to severe winter condition had negative influence on the results of the segment. The increased VAT and excise tax from 1st January, led to a time shift in demand from 1Q/2010 to 4Q/2009, as customers stocked up before expected raise.
The petrochemical segment recorded an operational profit of CZK + 97 m, 12 % lower y/y. Nevertheless the performance of the segment was much better than in 4Q/2009. EBIT grew by 194 % compared q/q, mainly thanks to higher olefin and polyolefin margins. In a y/y comparison the main positive factor were much better olefin margins, as well as cost- savings and increased capacity for polypropylene, which led to improved polyolefin sales volumes of 7 % y/y.
The motor fuel retail segment posted a much better result than a year ago. Operating profit (EBIT) reached CZK 131 m, i.e. 130 % more than in 1Q/2009. Sales volumes dropped slightly, partly due to less competitive prices of fuels in Czech Republic than in neighbouring countries after an increase in VAT and excise tax. The company strengthened its leading position thanks to significantly increased Verva premium fuels sales and also thanks to previous investments in modernising and the rebranding the Benzina petrol station chain.
Outlook for the coming period:
A rapid increase in fuel consumption in 2010 compared with 2009 should not be expected. The demand for refinery and petrochemical products is going up but very slowly. Other potential negative factors include unstable exchange rates, rising prices of crude oil or worsening other external conditions. Nevertheless, the Unipetrol Group is well prepared to face the unfavourable macroeconomic situation. The cost-saving measures have begun to be significantly visible. The company’s cash situation is good and its indebtedness is on very low level.
“The results of 1Q/2009 can be regarded as more than satisfactory. They have proved the high quality of our savings and optimizing plan accepted last year. However, we are careful not to be too optimistic. The markets have still not recovered. Margins are still below the pre-crisis level. Given the situation the cost control and improving efficiency efforts have to continue,” said Piotr Chełmiński, CEO and chairman of Board of Directors of UNIPETROL, a.s.
Attachment No. 1
Consolidated un-audited financial results (CZK million)
| Revenues |
14,513 |
18,347 |
18,039 |
-2% |
+24% |
| EBITDA |
709 |
620 |
1,352 |
+118% |
+91% |
| EBIT |
-127 |
-260 |
517 |
- |
- |
| Net result 1) |
-185 |
-262 |
309 |
- |
- |
1) Net result attributable to shareholders of the parent company
EBIT Segment Breakdown (CZK million)
| EBIT, of which |
-127 |
-260 1) |
517 |
- |
- |
| - Refining |
-329 |
-320 |
279 |
- |
- |
| - Petrochemical |
110 |
33 |
97 |
+194% |
-12% |
| - Retail distribution |
57 |
208 |
131 |
-37% |
+130% |
1) Minor mathematical discrepancy between segments and total due to rounding.
UNIPETROL, a.s. is a group of companies operating in the petrochemical industry in the Czech Republic. In 2005 UNIPETROL became a part of the PKN ORLEN Group, the largest oil processor in Central Europe. The UNIPETROL Group is oriented mostly towards oil processing, fuel distribution and petrochemical production. In all of these business areas the UNIPETROL Group is among the key players both in the Czech Republic and on the Central European market. The Group ranks among the leading firms in the Czech Republic in terms of its revenues, and employs more than 4,000 people.
Contact:
Blanka Růžičková
Spokesperson
UNIPETROL, a. s.
Telephone: +420 225 001 407, +420 731 881 111
E-mail: blanka.ruzickova@unipetrol.cz