Main points from PKN’s conference call to its 9M05 results: the contribution of Unipetrol to PKN net profit was only 6%, due to worse production mix; PKN produces higher margin products. Unipetrol’s refinery and retail business will be integrated into PKN, e.g., the same crude oil supply for all subsidiaries. The results of the partnership program between Unipetrol and PKN will be fully shown in Unipetrol’s results in Q4-05.
Unipetrol reported its 9M05 consolidated net income up by 18.4% y/y at CZK2.31bn, which is 6.7% above our forecast, but 2.8% below the market’s expectations. It is, however, important to note that the consensus was compiled from only three brokers, of which one estimate was significantly above the other two (CZK2.7bn). Therefore, we consider the results to be rather good.
The 9M05 results were significantly affected by the continued growth of the Czech economy, favourable prices and refining margins, as well as favourable prices and margins at petrochemical divisions. Thanks to higher volumes, cost cutting, and favourable margins, operating income for the 9M05 period came above our forecast by 6.4%. This, together with lower financial expenses due to refinancing of some debt at a lower interest rate, accelerated net income growth to 18.4% y/y.
Consolidated
IFRS, cons. CZK, m 9M05 9M04 % change Consensus 9M05
Revenues 79,292 62,810 26.2% 80,900 81,366
EBIT 3,851 3,346 15.1% - 3,620
Pre-tax Income 3,009 2,376 26.6% - 2,723
Min.Int.&Tax 2,289 2,010 - - 556
Net income 2,313 1,952 18.5% 2,380 2,167