(5 PLN, 0,42%) held the conference call on its 2Q07 results. The main topics discussed were the following:
Crude production volumes were below the expectation in 2Q07 at 99tk, due to the technical problems on one of the field. This negative trend should be reversed in 2H07. In overall company expects to deliver slightly higher volumes than in 2006 (543kt). This means that for 2H07 we should expect at least 312kt, versus 123kt in 1H07. Given the favorable crude oil price environment we see it as positive.
Gas tariffs will stay on the same level until the end of the year. The company is going to apply for new tariffs starting from 2008. Though no final decision on the amount was made yet, we believe will apply for new increase. Starting from 2008 the distribution companies will be unbundled, thus will be forced to pay for the distribution services. This gives a further reason for the tariff increase.
Distribution segment preformed poorly as the company booked around PLN 105m for employee bonus on the cost line. This could be repeated in the next years, however everything depends on AGM decision.
Poor performance on financials: was mostly related that company was not so successful with its hedge operations as in the previous quarter.