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Unipetrol generated positive EBITDA LIFO of 1,336bn CZK in 9M13 in difficult macro conditions

23-10-2013  

  • ​​Positive EBITDA LIFO of CZK 235m in Q3
  • Solid fuel sales of BENZINA network
  • Licence purchase for new polyethylene unit PE3
  • New contract with Transpetrol signed for 2014
  • Agreement with Administration of State Material Reserves – Czech Republic signed

In Q3 Unipetrol Group posted EBITDA LIFO of CZK 235m       (-80% y/y), including positive contribution of petrochemical and retail segments. Revenues reached CZK 24.859bn in Q3 (-12% y/y). Results were negatively influenced by worse refining macro, problems in petrochemical production resulting in lower sales, lower refining margins and higher renewable surcharges (POZE). Stable good level of petrochemical margins and better sales in retail segment mitigated these negative factors.

"The overall macro situation is weaker than everyone on the market expected, it was probably 7th quarter in a row of Czech economy recession in 3Q13. We also hoped that tax fraud legislation could be implemented faster and also expected some relief on OZE (renewable power charges), which did not happen this year. Last but not least we had some unexpected production problems this year. Having said that, our financial targets for 2013 will be tough to achieve," said the Chairman of the Board of Directors and CEO of Unipetrol, Marek Świtajewski. "On the other hand, we see positive development within retail segment sales and petrochemical segment. Both recorded good profitability within the last quarters, which is promising for our future results."

In the refinery segment, the volume of crude processed in Q3 reached 902 kt (-14 % y/y), due to scheduled complete turnaround of Kralupy refinery in September (and October) within 4-year cycle and two steam cracker shutdowns. Nominal utilization ratio stayed q/q flat on 80% in Q3. The refinery segment recorded EBITDA LIFO of CZK -256m in 3Q13, mainly due to poor refining macro, lower refining margins and weak Brent-Ural discount. Group sales of refinery products decreased to 836kt (-6% y/y) in Q3, due to big one-off sales in September 2012, dramatic increase of illegal fuel imports by rails in the second half of September and in October (slightly compensated by higher exports) and scheduled Kralupy refinery turnaround.  .

EBITDA LIFO in the petrochemical segment amounted to CZK +361m in 3Q13. The results of the segment were negatively affected by unplanned shut-downs of production, which resulted in lower sales y/y. On the other hand positive impact was visible from very solid level of petrochemical margins, higher positive inventory revaluation y/y and development of FX – stronger EUR vis-à-vis USD.  Company recorded sales decrease of petrochemical products to 366kt in Q3, mainly due to June floods in the Czech Republic, negatively impacting supplies of ammonia to Lovochemie and ammonia and ethylene to Spolana, and two steam cracker shutdowns, first starting in the middle of July and second in the middle of September.

The retail segment recorded a positive EBITDA LIFO of CZK +147m in 3Q13, mainly due to higher fuel margins, and higher fuel sales volumes, in spite of declining retail market in the Czech Republic overall. The better sales were reached mainly due to successful promotion activities. Retail non-fuels sales slightly better y/y. With new legislation valid from November 2013, Benzina expects improvement of the Czech fuels market environment and additional mitigation of illegal imports.

On 4 August 2013 Unipetrol RPA signed an agreement with the Administration of State Material Reserves on processing petroleum during oil crisis situations. This strategic agreement defines the conditions under which emergency oil reserve held by the ASMR would be processed at UNIPETROL Group refiners, should a state of oil crisis be declared. The ASMR would then distribute the processed petroleum products to the crisis management authorities and the public.

On 14 August 2013, Česká rafinérská and the Slovak national pipeline operator Transpetrol signed a pipeline transportation contract that determines new tariffs for crude oil transportation to theCzechRepublic through the Slovak branch of the Druzhba Pipeline for the year 2014. Positive impact on Unipetrol Group full-year 2014 EBITDA is estimated at around CZK 17m compared to the year 2012.

At the beginning of October Unipetrol RPA has signed a license agreement with INEOS, based on which it acquired the right to use a production process and technology for the new polyethylene unit (PE3). Purchase of the license is the first achieved milestone and represents the official start of the project's execution. Now Unipetrol is ready to take further steps and create a detailed schedule of this project. The first task is to choose a general contractor, which should be done in the first half of 2014.


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 3,700 people.

Contact:
Mikuláš Duda
Press Department Manager
Telephone: +420 225 001 407, +420 736 502 520
E-mail: mikulas.duda@unipetrol.cz

Attachment No. 1

Consolidated un-audited financial results (CZK million)

 

3Q12

2Q13

3Q13

Y/Y

 Revenues

28,407

24,710

24,859

-12%

 EBIT​​​DA LI​​FO

1,170

663

235

-80%

 EBITDA

1,624

-1

737

-55%

EBIT

911

-588

160

-82%

 Net income

645

-429

-130

n/a

 

EBITDA LIFO Segment Breakdown (CZK million)

 

3Q12

2Q13

3Q13

y/y

 EBITDA LIFO, of which

1,170

663

235

-80%

  • ​​Refining

718​

-151

-256

n/a

  • Petrochemical

222

682

361

63%

  • Retail distribution

210

145

147

-30%

  • Others

19

-13

-18

n/a

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