Kety’s CEO, Dariusz Manko, gave an interview to the daily Parkiet, in which he reiterated that the company sees the best growth opportunities in the aluminium systems segment. It is least capital intensive, demand is growing and this market is much less concentrated than extruded products or packaging businesses, giving Kety better chances to compete having good products and distribution network. According to Dariusz Manko, acquisition pipeline for 2006 includes foreign company operating in the high value added extruded products, which would expand Kety’s value chain. Kety’s CEO stated that after abandoning acquisition strategy in the packaging segment it becomes very challenging for the company to gain market share in this business and he does not exclude selling the packaging division in the future. As an alternative, Kety could acquire an aluminium door and window systems business with a strong position in Western Europe.
We believe, that the interview does not bring any new information except for the possibility of disposing packaging business, which we regard slightly negatively. Kety are expected to publish preview of 1Q06 results on 20-31 of March. We expect 1Q06 results to be very bad, mainly due to the results of the fire and booking of an extraordinary loss, which we estimate at PLN 10-30m. We reiterate our Sell recommendation for Kety with a fair value of PLN 116.8 per share.