Unipetrol says that October shutdowns of Litvinov refinery and steam cracker of Chemopetrol would result in a decline of its consolidated four-quarter result by some CZK 400 million (US$ 18.2m).
Our view: Unipetrol CEO Francois Vleugels already told Reuters last month that operating profit is likely to remain flat this year at last year's level of CZK 5.27 billion, but that it would have been significantly higher without the October stoppages. Mr Vleugels estimate is in line with our forecast: our current EBIT estimate CZK 5.65bn EBIT for 2006 does not contain the CZK 400m negative impact of October shutdowns. Moreover, on the back of the petchem margin improvement in 4Q06, we can imagine that full year EBIT will slightly exceed last year's level. Therefore, even the financial impact from the shutdowns is new information for the market; we do not expect a negative reaction to the news.