After its EGM on last Friday, PGNiG announced it will more intensively look for gas exploration possibilities abroad in order to lower their dependence on other supplies.
At the same time the acting CEO Mr Marzec, said, PGNiG will more intensively look for exploration possibilities in order to lower dependence on other supplies. The company is seeking production licenses primarily in North Africa, Kazakhstan and Ukraine, Bloomberg reports Mr Marzec as saying. However, if the company won’t be successful with finding appropriate upstream projects, they will raise the dividend payout for 2006. Mr Marzec also commented on FY06 results. He says that unconsolidated net income may approach 1 billion zloty this year.
Our view: While the news on accelerated foreign exploration is neutral for us, the comments on 2006 results are negative. Our FY06F net profit estimate is PLN 1.5bn on a consolidated level. Since the consolidation of the regional gas companies might not reach PLN 0.5bn we could be forced to lower our earnings forecast. We are going to call the company today to map earnings prospects for 2H06. The news could also be negative for the market, typically expecting PLN 1.1-1.5bn IFRS consolidated net profit for this year.