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UNIPETROL Group reports a net profit of CZK 65m for 2008

26-02-2009  

Group financial results significantly dropped in 4Q due to the negative impact of a deep economy crisis. Low margins and negative macroeconomic factors caused a drop in the annual net profit to CZK 65m. Nevertheless, even with the difficult situation on the world market the Group achieved good results in operating efficiency. Net sales increased by 11% compared with 2007, and processed crude oil volume by 9% y/y. Unipetrol continues its effort to increase efficiency and maintain its good position on the market.

Results of the year 2008:

Prague, 26 February 2009 – In 2008 the UNIPETROL Group achieved a net profit of CZK 65m * . An unstable macroeconomic environment and some concurring external factors had a negative impact on this unaudited result, which is 95% lower than in 2007:

- Historically unique, and therefore unexpected, development of crude oil prices (which climbed to almost US$ 150/bbl in July, only to plunge to less than US$ 50/bbl towards the end of the year),

- Low refinery and petrochemical margins mostly in Q4,

- An unfavourable development of exchange rates

- In mid-2008, crude oil supplies through the Družba oil pipeline were stopped, and then reduced,

- Lower demand for Unipetrol’s products was felt in Q4,

- During Q4 the revaluation of inventories led to a negative effect of CZK 2.058bn.

EBIT plunged to CZK 1.003bn, which is 79% less than in 2007, mainly for the above reasons. EBIT was low in both the refinery and petrochemical segments. The retail segment has recorded a relatively good year: Benzina’s market share further increased in 2008; despite the complicated development of the market, fuel sales at Benzina petrol stations went up compared with the previous year.

Revenues rose by 11% to CZK 98.144bn. Unipetrol processed a total of 4,533 kt of crude oil in 2008, which was 9% more than in 2007.

Comments on Q4 2008 results

As in the previous quarter, the unfavourable macroeconomic development was again negatively reflected in the results of the refinery segment despite the sales of fuels and refinery products went up by 6% in comparison with the previous year. But low margins and also the revaluation of inventories, which pushed the refinery segment’s profit down by CZK 704m, were negatively reflected in the result. Another unfavourable factor was the US dollar growing stronger against the euro.

The petrochemical segment experienced considerable deterioration in comparison with relatively good Q3. EBIT slumped to a loss of CZK 379m; the key factors leading to the loss included lower demand for polyolefins and the subsequent collapse of polyolefin margins. The October shutdown of the ethylene unit slashed the segment’s result by CZK 229m, and the negative impact of inventory revaluation amounted to minus CZK 1,354m.

In comparison with the preceding quarter, retail distribution posted EBIT lower by 35% and amounting to CZK 89m, mainly due to the lower margins together with lower sales of fuels towards the end of the year. Nevertheless, the sales in shops and gastronomy developed favourably. In particular the completed rebranding of the Benzina Plus petrol stations therefore contributed to a dynamic increase in sales in the gastronomy segment (the Q4 turnover was double that of the previous year) and in the non-fuel business (up by 10% y/y in Q4).

Outlook for the coming period

“There is a hard work ahead of us despite of how long and deep economy crisis will be. My task is to prepare and lead Unipetrol through this period successfully and to be ready to grow at the time of economic recovery. To secure its best pole position, we will use all ways and means to reduce working capital, cut costs and at the same time increase revenues,” says Krzysztof Urbanowicz, Unipetrol Chairman and CEO.

Unipetrol’s management will concentrate on increasing the feasible throughput and production volumes. Profitability will be raised by strict cash management and working capital squeeze. The company will focus on costs via strict operating costs control and capital expenditure reduction. Initiatives in the pipeline also include a modified product portfolio, improved efficiency of the production of polyolefins, and a competitive pricing policy for our products. Unipetrol is poised to strengthen its current position on the central European market. Unipetrol’s indebtedness is on a low level and the value of overdue receivables is not rising.


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

Press Spokeswoman

UNIPETROL, a. s.

Telephone: +420 225 001 407, +420 731 881 111

E-mail: blanka.ruzickova@unipetrol.cz

Attachment No. 1

Consolidated, unaudited financial results (CZK million)

  2007 2008 2007/2008
Revenues 88​​,462 98,144 ​​+11%
EBITDA 8,298 4,481 - 46%
EBIT 4,812 1,003 - 79%
Net profit *) 1,210 65 - 95%

EBIT Segment Breakdown (CZK million)

  200 2008 2007/2008
EBIT, of which 4,812 1,003 ​- 79%
Rafining 947 13 - 99%
Petrochemicals 3,348 3​59 - 89%
Retail 524 455 - 13%

Consolidated, unaudited financial results (CZK million)

  Q2 2008 Q3 2008 Q4 2008 3Q/4Q
Revenues 27,081 29,899 19,015 - 36%
EBITDA 1,702 ​1,638 - 351​  
EBIT 838 772 - 1,261 1)  
Nez profit * 302 557 - 1,200  

*) Net profit attributable to the shareholders of the parent company

1) Total negative macro effect adds up to CZK 1,263m

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