Unipetrol reported stronger-than-expected 4Q06 figures this morning. IFRS consolidated net income came in red at CZK 1.1bn for 4Q06, versus CZK 1.1bn a year ago and CZK 822m last quarter. The figure 15% above the consensus estimate of CZK -1.3bn and 22.4% above our own estimate of CZK 1.4bn as we overestimated the negative impact of one-offs on the company’s performance. Since the stock fell almost 10% in the last 4 days we might see and the results came not as in red as it was expected by the market, we might see positive market reaction on the figures.
Total EBIT came in at negative CZK 916m for 4Q06 versus CZK 1.7bn in the last quarter and CZK 1.4bn a year ago. The figure came better than our own estimate of CZK -1.15bn however much lower than the market expectation of CZK -251m. Since it was very difficult to exactly assess the amount of one-offs attributed to both shutdowns of the refineries and Kaucuk impairment costs, there were major discrepancies in market estimates and actual figures.
Financials came in red CZK 26m much better than in the previous quarters and above our expectations (CZK -116m).
We maintain our Hold recommendation on the stock with a price target of CZK 240.1.