Unipetrol posts profit for 1Q/2010
Return to profitability after five quarters: net profit of CZK + 309 m
Positive EBIT in all segments: operational profit of CZK + 517 m
This positive result achieved mainly thanks to better product prices and significant cost reductions
External conditions remain worse than in the pre-crisis period
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)
| |
1Q09
|
4Q09
|
1Q10
|
Q/Q
|
Y/Y
|
|
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)
| |
1Q09
|
4Q09
|
1Q10
|
Q/Q
|
Y/Y
|
|
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.
