The results of Unipetrol´s main subsidiaries underperformed our expectations

Unipetrol's main subsidiaries reported their H1 2003 earnings yesterday:
Benzina's, the retailer, were in line with our expectations; Chemopetrol's (olefins, polyolefins) operating margins were better, but its net income was roughly in line with our projections; Paramo's (refinery) results were somewhat better; and Kaucuk (plastics) and Spolana underperformed on the net profit level.
Nevertheless, these subsidiaries’ results were outweighed by the surprisingly poor results of Ceska rafinerska, the refinery, which reported a net income of CZK 358 mil. vs. our expectation of CZK 1,456 mil. (and vs. CZK 878 mil. in Q1 2003).
While the subsidiaries' performance mostly improved on an annualized basis in H1 2003, the overall results underperformed our expectations and we see them as negative. Nevertheless, as the stock is driven mostly by privatization-related buyout expectations at present, the results should not have a significant impact on Unipetrol stock.

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