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UPDATE 2-Unipetrol charge pushes Poland's PKN to operating loss
January 18, 2013 / 10:14 AM / 5 years ago

UPDATE 2-Unipetrol charge pushes Poland's PKN to operating loss

* PKN posts unexpected Q4 operating loss of $227 mln
    * Says due to writedown on Unipetrol refining segment
    * Paramo unit at Unipetrol is possible sale target
    * PKN and Unipetrol shares fall, underperform wider market

 (Adds detail on Unipetrol, background)
    By Agnieszka Barteczko and Jason Hovet
    WARSAW/PRAGUE, Jan 18 (Reuters) - Poland's top oil refiner
PKN Orlen posted an unexpected fourth-quarter operating
loss of 700 million zlotys ($227 million) due to a writedown in
the refining part of Czech unit Unipetrol.
    Unipetrol, in which PKN has a 63 percent share,
said on Friday its 4.5-billion-crown ($236 million) impairment
charge reflected a drop in asset values due to a tough refining
environment as well as its intention to sell some assets. 
    Unipetrol added its earnings before interest and tax were
flat excluding the writedown.
    Refiners across Europe are seeing their margins squeezed as
a slowdown in demand due to a faltering economy has left the
industry with excess capacity. 
    Unipetrol's head of investor relations Michal Stupavsky said
about 90 percent of the charge was due to an impairment of
assets related to its stake the Czech Republic's largest
refinery Ceska Rafinerska.
    He added the possible sale of assets referred to Unipetrol's
Paramo unit, where it ended crude processing last year and which
it is restructuring, as well as a Slovak subsidiary of Paramo.
    In October, Unipetrol sold Paramo Asfalt to parent company
PKN Orlen of Poland for 116 million crowns.
    Stupavsky declined to comment on a possible buyer for the
Paramo unit. "The sale is very likely in the foreseeable
future," he said.
    In a trading statement, state-controlled PKN said sales in
Poland were down due to a drop in fuel consumption, partly
offset by an increase in volumes in German and Czech markets. 
    "The first thing that is striking is the 700 million zlotys
writedown. But even the clean operating profit is some 150
million zlotys lower than I expected due to the refining
segment," Lukasz Prokopiuk, analyst at Warsaw based-brokerage DM
IDM, said.
    Shares in PKN fell 0.5 percent, while Unipetrol was down 1.4
percent within flat markets in Warsaw and Prague respectively. 
    In a Reuters poll, analysts forecast a 453 billion zlotys
operating profit, 70 percent down on the previous quarter.
    In the fourth quarter of 2011 PKN made an operating loss of
1.06 billion zlotys after a number of one-offs.
    PKN's total throughput went up by an annual 4 percent to
7.49 billion tonnes, with a 3 percent increase in output at
domestic plants in its Plock business.
    Throughput at Unipetrol in the Czech Republic
fell 4 percent, while at Mazeikiu in Lithuania it increased 10
    PKN and Unipetrol are to publish their full results for the
fourth quarter on Jan. 23.
    ($1 = 3.0855 Polish zlotys)
    ($1 = 19.0972 Czech crowns)

 (Editing by David Holmes and Mark Potter)

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