Low margins in the refinery and petrochemical businesses will depress Unipetrol's H2 2003 profits, and high crude oil prices and the recession in Germany, Unipetrol's main export market, will postpone any recovery until next year, Unipetrol's CEO Pavel Svarc told Reuters on Friday. He gave no 2004 profit forecasts but said Unipetrol would continue cutting costs, including making staff layoffs.
We expect that the H2 performance of the main subsidiaries will be on the level set by prices and margins in Q2 2003, and the CEO’s statement suggest somewhat worse expectations. Nevertheless, as Unipetrol stock is largely driven by privatization-related news, we do not expect the 2003 performance of Unipetrol to significantly influence the eventual privatization (and minority-shareholder buy-out) price.
Separately, Chemopetrol, 100%-owned by Unipetrol, will halt its ethylene production for 45 days due to a planned revamp of the unit.
Jiří Soustružník