Prague, 31 August 2010 – Unipetrol Group improved its results significantly as compared to last year and also to 1Q/2010. The Group posted net profit of CZK +520m and operational profit (EBIT) of CZK +802m in 2Q/2010. These results were achieved thanks to better macroeconomic environment but also due to the internal effects of the optimisation and cost-savings programme launched last year.
More favourable macroeconomic conditions of 2Q/2010 were characterised by higher demand for petrochemical and refinery products. Year-to-year deterioration in retail due to less competitive prices burdened with higher tax in comparison to neighbouring countries was partly compensated by the growing demand for premium VERVA fuels.
Net profit went up by 68%, EBIT was 55% higher than in 1Q/2010. The improvement of profitability was supported by the operational efficiency, cost savings and sales achievements. Unipetrol succeeded substantially in increasing its refinery sales volume, the petrochemical sales volume also grew. The fixed costs were reduced further in 1H/2010 by more than CZK 100m compared to the same period of 2009.
Revenues in 2Q/2010 exceeded CZK 23bn. Positive EBIT was achieved, as in previous quarter, in all Unipetrol Group segments. The consolidated EBIT reached the levels seen in mid-2008.
Commentary by segments:
In 2Q/2010 the operational profit of the petrochemical segment increased significantly (+ 207% q/q) amounting to CZK +298m. Compared to the 2Q/2009, the segment was influenced positively by higher olefin as well as polyolefin margins, very good sales volume of olefins and benzene, due to maintenance shutdowns of several plants in Europe and overall higher demand for petrochemical products. The y/y weaker EUR against the USD negatively influenced the segment.
The refining segment, posting EBIT CZK +356m, further improved its already good performance from the previous quarter. Compared to 2Q/2009 the segment benefited mainly from the higher demand for fuels in the CEE region and higher margins. The flat domestic demand for fuels was offset by good business results and increased export. Beside that Unipetrol succeeded in exploiting business opportunities created by maintenance shutdowns in Slovakia and Austria. The other positive factors influencing the segment were wider Brent-Ural differential, higher crude oil throughput and favourable development of the exchange rate of CZK against USD.
The motor fuel retail segment performed well, with operating profit reaching CZK +135m, i.e. +3% more than in 1Q/2010. The segment profited mainly from stable unit margins and improving sales of VERVA premium fuels. New Retail Information System (RIS) was implemented and cooperation with other fuel sellers on fleet cards cross-acceptance was launched. However, the total sales volumes showed y/y deterioration due to continuously less competitive prices in the Czech Republic, as compared to neighbouring countries.
Outlook for the coming period:
There were some positive trends seen in 1H/2010. Several external factors affecting Unipetrol business have reached or are close to pre-crisis level, but other - such as refinery margins or B-U differential - are still lagging behind. However Unipetrol is much better prepared to face unfavourable situation than last year. Company is in a very good cash situation and its indebtedness is on a very low level.
Unipetrol would like to continue to make profits throughout the rest of the year. However, recovery of economy and market is a gradual process. Fuel consumption in the Czech Republic is low and an increase without changes in tax burden of motor fuels would be challenging. To minimize impact of still not fully recovered macroeconomic situation, the Unipetrol Group will continue strict cost control and CAPEX with maximum level of 2009. The efforts to increase production reliability and sales efficiency will also go on.
"The Group again improved its results and it may be said that it finished the first half of the year in a very good condition. Generated profit demonstrates that we managed to find reserves and mobilise our forces this year. The impact of the economic recession is, however, still visible. Efficiency improvements and strict cost control remain therefore the key elements of our further efforts," says the CEO and Chairman of the Board of Directors of Unipetrol, Piotr Chełmiński.
Attachment No. 1
Consolidated un-audited financial results (CZK million)
| Revenues |
15,795 |
18,039 |
23,409 |
+30% |
+48% |
30,308 |
41,448 |
+37 % |
| EBITDA |
584 |
1,352 |
1,669 |
+23% |
+186% |
1,293 |
3,021 |
+134% |
| EBIT |
-271 |
517 |
802 |
+55% |
-- |
-399 |
1,318 1) |
-- |
| Net result 2) |
-359 |
309 |
520 |
+68% |
-- |
-544 |
829 |
-- |
1) Minor mathematical discrepancy between segments and total due to rounding.
2) Net result attributable to shareholders of the parent company
EBIT Segment Breakdown (CZK million)
| EBIT, of which |
-271 |
517 |
802 1) |
+55% |
-- |
-399 |
1,318 1) |
-- |
| • Refining |
-62 |
279 |
356 |
+28% |
-- |
-392 |
635 |
-- |
| • Petrochemical |
-457 |
97 |
298 |
+207% |
-- |
-346 |
395 |
-- |
| • Retail distribution |
187 |
131 |
135 |
+3% |
-28% |
243 |
266 |
+9% |
| • Others |
61 |
10 |
12 |
+20% |
-80% |
96 |
22 |
-77% |
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