Net profit of CZK +175m, operational profit of CZK +238m 
Positive results were achieved despite worse external factors 
Utilisation ratio over 85% thanks to the good technical availability of the units 
+51% y/y increase in sales volumes of premium VERVA fuels and +18% y/y growth in polyolefins

Prague, 29 th October 2010 – Unipetrol Group posted a net profit of CZK +175m and an operational profit (EBIT) of CZK +238m in 3Q/2010. These results show significant improvement of profitability: EBIT was almost 50-times higher than last year. Revenues amounted to CZK 22.5bn in 3Q/2010. The Group processed 1,182 kt of crude oil which is 2% more than in the same period last year and about 10% more q/q.

Unipetrol succeeded in increasing y/y refinery sales volume and the polyolefin sales volume grew by 18% y/y. The demand for premium VERVA fuels went up by more than 50% y/y. The fixed costs were reduced further in 9M/2010 by more than CZK 100m compared to the same period of 2009.

The petchem and retail segments fueled EBIT of CZK +238m. Despite the prevailing unfavorable situation caused by lower demand for diesel and gasoline in the Czech Republic due to the ongoing price differences in relation to neighboring countries, the Benzina result was the best throughout this year. The drop in classic fuels was partially compensated by the growing sales of Benzina premium VERVA fuels.

The Group’s profitability improved y/y however declined q/q by 70% - mainly due to the deterioration of external factors and one-off charges. The external environment grew q/q worse mainly in the refinery business characterized by extremely low margins (ca -40% q/q) and narrow B-U differential (ca -50% q/q). The Group’s results were also negatively affected by the q/q foreign exchange rates changes (ca CZK -42m q/q). Additionally, there were one-off situations such as a shift of regular steam cracker shutdown and CZK 100m booking of reserves for planned closure of an outdated T200 heat and power plant.

Commentary by segments:

In 3Q/2010 the operational profit of the petrochemical segment amounted to CZK 176m, i.e. 20% less than in the same period last year. The most important factors positively influencing the segment were year-to-year: higher combined petrochemical margins, better sales volumes mix and launched successful initiatives related to the segment’s pricing policies. On the other hand, the performance of this segment was y/y worse due to the strengthening of USD against EUR.

The refining segment posted a loss of CZK -143m in the 3Q/2010 with revenues of CZ 17bn (+21% y/y). In comparison to the 3Q/2009 the segment benefited from a higher share of more profitable products in its production portfolio and better sales volumes. The B-U differential y/y doubled and refinery margins rose y/y thanks to stronger diesel and LPG spread. In the case of this segment, further positive effects came from y/y strengthening of USD against CZK and the applied cost-cutting measures. On the other hand, the performance of the segment was lower due to revaluation of its stocks.

The retail motor fuel segment achieved operating profit CZK +171 m, i.e. 29% less than in 3Q/2009. In comparison to the same quarter last year, the segment benefited from a growing demand for premium fuels (+51%). The negative effects were, year-to-year, lower gasoline as well as diesel margins, a weaker demand for gasoline due to higher prices in the CR compared to other countries and lower non-fuel sales.

Outlook for the coming period:

Despite worsening of some external factors – such as refinery margins or B-U differential – there are several positive trends that can be seen in 2010. The Group in 3Q/2010 achieved the best quarterly refining sales volumes over the last two years while nominal utilization ratio of refinery capacity was over 85% thanks to good technical availability of units. Positive contribution was visible on the polymers side and launched sales initiatives started to bear their fruit. The company is in a very good cash position and its indebtedness is at a record low level.

However, the recovery of the economy and the market is still very slow and that is why increasing profitability is a gradual process. Unipetrol is conducting its business in a very competitive environment with several refinery capacities operating in the CEE region and retail weakened by the tax policy of the CR. Further weakening of Unipetrol competitiveness could be caused by the proposed energy cost increases due to renewable/photovoltaic sources.

"The situation in our business is still challenging. In all segments, we have to face an extremely competitive environment, moreover we are uncertain about energy costs in the next year. Nevertheless, the Group is in a very good financial condition, ready to face challenges. For the next period we need to continue our efforts, focusing on efficiency improvements and cash generation,”says the CFO and Member of the Board of Directors of Unipetrol, Mariusz Kędra.

Attachment No. 1

Consolidated un-audited financial results (CZK million)

1) Net result attributable to shareholders of the parent company

EBIT Segment Breakdown (CZK million)

1) Minor mathematical discrepancy between segments and total due to rounding.

UNIPETROL, a.s. controls companies operating in the petrochemical industry in the Czech Republic. In 2005 Unipetrol became a part of the PKN ORLEN Group, the largest crude 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 almost 4,000 people.

Contact: 
Blanka Růžičková 
Spokesperson for Unipetrol, a.s. 
Telephone: +420 225 001 407, +420 731 881 111 
E-mail: blanka.ruzickova@unipetrol.cz