By Sean Carney
PRAGUE--Unipetrol AS (BAAUNIPE.PR) has no plans to sell any of
its oil refining capacity as its needs a stable flow of feedstock
to develop its profitable petrochemical business, the Czech
company's chief executive said Wednesday.
Marek Switajewski said Unipetrol was increasing its stake in
Ceska Rafinerska, the country's largest refinery, and wouldn't sell
its Kralupy facility despite surplus capacity at its oil refining
unit.
His comments throw cold water on a proposal by Czech Finance
Minister Andrej Babis, made this spring, that the Czech state
should purchase Unipetrol's refinery in the town Kralupy.
Earlier Wednesday, Unipetrol said its petrochemical business
posted a 25% annual increase in operating profit in the three
months to end-June, but overall the company reported a surprise net
loss of 3.49 billion koruna ($171 million) on an impairment charge
that stemmed from surplus capacity at its refining unit.
However, excluding the one-off charge, the company swung into a
higher-than-expected net profit of CZK346 million in the second
quarter, compared with a net loss of CZK428 million during the same
period last year.
Majority-owned by PKN Orlen SA (PKN.WA), Unipetrol said on June
3 that it would buy the 32% stake in Ceska Rafinerska held by
Italy's ENI spa (ENI.MI) for EUR30 million, giving the Czech
company full control of the Ceska Rafinerska.
Mr. Switajewski said that holding a qualified 67.5% majority
stake in Ceska Rafinerska would allow much more effective decision
making and open the door to optimum feedstock flows to Unipetrol's
petrochemical business, which in turn would help the company's
overall profitability.
At 1026 GMT, Unipetrol shares traded down 1.2% on the day at
CZK128.5 in Prague.
Write to Sean Carney at sean.carney@wsj.com and @SeanCarneyWSJ
on Twitter.
Go to http://blogs.wsj.com/emergingeurope for the WSJ blog on
Central and Eastern Europe, covering business, politics, society
and more, written by our correspondents across the region.
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