Prague-listed Czech petrochemical company Unipetrol said Wednesday it expected fourth-quarter operating profit (EBIT) to be worse than in the third quarter, citing a planned shutdown of its Litvinov steam cracker, reductions in capacity and the decommissioning of an aging power plant, as factors impacting the PKN Orlen-controlled company’s bottom line.
Unipetrol said it estimates EBIT (earnings before interest and taxes) in the final quarter of 2010 will be positive but lower than the previous quarter (Kč 238 million), with the Czech currency’s appreciation in Q4 2010 expected to reduce net profit by some Kč 90 million. The company is due to release Q4 2010 results on Feb. 10.
“The main factors that influenced the quarter-on-quarter performance of the refining segment in the fourth quarter 2010 were: widening of B-U price differential by 65 percent (positive), higher refining margin thanks to better naphtha, gasoline as well as diesel spread (positive), lower crude oil throughput by 3 percent (negative),” Unipetrol’s management said in a statement.
The group also cited a stronger Czech crown against the US dollar by 6 percent (negative), the LIFO [last-in, first-out]effect (positive), lower volumes of fuels sold due to the start of winter season “as well as technical issues at the beginning of December in Litvinov refinery (negative).” Shutdowns at the steam-cracker and the reduction of processing capacity in the Litvinov refinery in December will reduce EBIT significantly.
Shutdowns at the steam-cracker and the reduction of processing capacity in the Litvinov refinery in December will reduce EBIT by significantly. “[The] accelerated steam-cracker shut down at the end of September lasting through the beginning of October is estimated to have a negative EBIT impact of approximately Kč 80 million” the statement said while the “temporary reduction of processing capacity in Litvinov refinery during two weeks in December due to technical issues on hydrocracking unit is estimated to have a negative EBIT impact of approximately Kč 70 million.”
Unipetrol said the main factors that influenced the quarter-on-quarter performance of the petrochemical segment in Q4 2010 were: “slightly higher total sales volumes on the back of better benzene and agrochemicals sales, which more than compensated lower demand for polyolefins (positive), lower olefin margin by 16 percent on propylene, benzene and ethylene spread (negative) as well as lower polyolefin margin by 11 percent attributed mainly to weaker polypropylene spread (negative), the LIFO effect (positive), a flat Czech crown against the euro, supported by 5 percent stronger euro against the US dollar (positive).”
