According to Polish daily Parkiet, Kety has put up for sale its real estate located in Torun and awaits offers till the end of May. The real estate belongs to Kety’s subsidiary, Run-Pack, that was dealing with flexographic printing. After the fire damanged the production capacity in Torun, Kety’s management has decided to introduce changes in the geographical location of its remaining flexographic printers and transferred the Torun-based production facility to its Alupol subsidiary, located in the special economic zone, so as to optimize taxes paid and obtain some PLN 1m cost savings.
The decision on moving the production facilities, in our opinion, to a substantial extent contradicted the initial idea behind the Torun based facilities – the Run-Pack subsidiary was created only at the beginning of March 2005. According to the company’s spokesman, the value of the real estate stands at around PLN 5m. We believe the news should have a neutral trading impact. However, should Kety manage to sell the real estate at a profit, it could positively influence annual figures. We reiterate our Sell rating for Kety with a fair value estimate at PLN 116.8 per share.