Unipetrol expects 2006 operating profit to remain flat this year, Reuters reported Chief Executive Francois Vleugels as saying yesterday. Although margins are better than expected this year, shutdowns at Litvinov refinery and Chemopetrol’s steam cracker negatively impacted the operating performance. He also added that net profit could also be close to last year's CZK 3.46bn, however, it very much depends on how the company would threat one-off items.
Our view: We expect EBIT to come in at CZK 5.65bn this year, up 7% y/y from CZK 5.27bn last year. Although companies usually try to be more conservative than the market, since we are already in 4Q06 we consider the comments of Mr Vleugels as slightly negative and putting pressure on our earnings estimates. Also, we expect net earnings to increase 20% y/y to CZK 4.1bn. Until the release of the 3Q06 results, however, we do not intend to change our estimates.