While refining segment of the group (especially Unipetrol rafinerie) reported figures below our projections, the downstream was somewhat better than expected.
Relatively strong demand for olefins, polyolefin’s, and plastics supported the performance of Chemopetrol, Kaucuk and Spolana. This both in terms of their capacity utilization and pricing power.
The refinery segment of the group did not meet our expectations. Although Ceska rafinerska reached profitability at levels above our expectations (rising volumes processed, changing product structure), this is more than offset by tze size of the influence of the one-month outage in the second refinery - Paramo, and especially poor trading margins of Unipetrol rafinerie.
Benzina, a fuel retailer, operates on a low margin wholesale market and fiercely competitive retail market. Nevertheless, cost savings enabled it to reach profits above the expectations.
The results are relevant mostly for those investors who do not want to excise a post-privatization buy-out option. This would be done with the intention to get an exposure to operational and ownership restructuring of Unipetrol group under management of PKN Orlen.
(CSOB - Investment research)