Despite worsened results in the refining segment, the downstream drove an overall y-o-y performance improvement in HI. Not as strongly as we expected, though.
Rising worldwide refining margins had a positive impact on Unipetrol rafinerie (Ceska rafinerska collects only a processing fee and its performance in terms of margins is relatively stable) in Q2. Nevertheless, HI results over the whole segment also reflect outages in both refineries (Paramo, Ceska rafinerska) - its performance therefore worsened y-o-y.
Benzina, a fuel retailer, operates on the low-margin wholesale market and the fiercely competitive retail market. Despite cost savings it is still struggling to remain above the break-even level. In addition, its HI profitability was hit by a one-off revaluation of assets (CZK -248m); excluding this impact, Benzina approximately met our expectations in terms of net income.
The strong market demand for olefins, polyolefins, and plastics observed in the first quarter supported the performance of Chemopetrol, Kaucuk and Spolana (both in terms of their capacity utilization and pricing power). Demand eased somewhat in the second quarter, but the downstream still reports a sizable y-o-y performance improvement in HI05 reflecting the improved market conditions and cost savings.