PRAGUE, Feb 4 - The 2008 fourth quarter operating profit (EBIT) at Czech oil refiner Unipetrol (UNPEsp.PR) will likely be negative, the company said in a statement released late on Tuesday.
Unipetrol, 63 percent-owned by Poland's PKN Orlen PKNA.WA, has suffered in past quarters due to fluctuation of crude prices, the Czech crown exchange rate, and a pressure on margins caused by a faltering demand.
The crude price dropped sharply in the period while a Brent-Ural price differential fell to a 7-year-low, said Unipetrol which mainly processes Ural crude.
The company said it was also hit by further weakening of the Czech crown against both the dollar and the euro.
"The sharp decrease of crude oil price in the fourth quarter of 2008 as compared to the third quarter resulted in negative inventory revaluation and decreased the operating result by 1.82 billion crowns," Unipetrol said.
The main factors that influenced the performance of the petrochemical segment in the fourth quarter included a drop in prices of petrochemical products, lower polyolefin margins, weak demand for petrochemical products due to customers' destocking, and cutting back production.
An ethylene unit shut down in October slashed the fourth quarter operating result by 229 million crowns, the company added.
Unipetrol releases its full-year earnings results on Feb. 26.
Its shares fell 4.4 percent on Tuesday to 122.3 Czech crowns ($5.58). They have lost 61.2 percent in the past year, underperforming a 55.4 percent drop in Prague's index .PX.
Unipetrol, 63 percent-owned by Poland's PKN Orlen PKNA.WA, has suffered in past quarters due to fluctuation of crude prices, the Czech crown exchange rate, and a pressure on margins caused by a faltering demand.
The crude price dropped sharply in the period while a Brent-Ural price differential fell to a 7-year-low, said Unipetrol which mainly processes Ural crude.
The company said it was also hit by further weakening of the Czech crown against both the dollar and the euro.
"The sharp decrease of crude oil price in the fourth quarter of 2008 as compared to the third quarter resulted in negative inventory revaluation and decreased the operating result by 1.82 billion crowns," Unipetrol said.
The main factors that influenced the performance of the petrochemical segment in the fourth quarter included a drop in prices of petrochemical products, lower polyolefin margins, weak demand for petrochemical products due to customers' destocking, and cutting back production.
An ethylene unit shut down in October slashed the fourth quarter operating result by 229 million crowns, the company added.
Unipetrol releases its full-year earnings results on Feb. 26.
Its shares fell 4.4 percent on Tuesday to 122.3 Czech crowns ($5.58). They have lost 61.2 percent in the past year, underperforming a 55.4 percent drop in Prague's index .PX.
