UPDATE 3-Unipetrol 2006 profit beats forecast, shares gain

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By Jan Korselt

PRAGUE, March 1 (Reuters) - Czech oil group Unipetrol posted a smaller-than-expected drop in 2006 profit on Thursday, but its share price pared some gains after the company cautioned production halts would hurt profits this year.

Unipetrol said excluding minority interests, net profit more than halved year-on-year to 1.62 billion crowns ($75.8 million). But the result beat an average profit estimate of 1.52 billion crowns in a Reuters poll of six analysts.

Revenue jumped 17 percent year-on-year to 94.59 billion crowns, above the average consensus forecast of 92.37 billion.

The earnings release sent Unipetrol shares more than 4 percent higher before news of longer-than-expected shutdowns at three refinery and petrochemicals units later this year.

Unipetrol was up 2.6 percent at 227.80 crowns by 1210 GMT, still outperforming a 1.1 percent gain in the PX index .

"I think that the market had already calculated very bad performance for the fouth quarter because the stock price went down in the past couple days," said Peter Tordai, analyst at KBC Securities, which has a "buy" investment rating on the stock.

"Because it is mostly due to one offs, I am not sure if we should be so negative on the company," he added.

Last year, Unipetrol booked impairment charges worth a total of 2.1 billion crowns on the sale of subsidiaries, as well as an extra 324 million crown tax charge, which reduced profitability.

Its profits also fell due to a 333 million crown charge booked against a fine levied by the European Commission. Refinery shutdowns cost the company another 400 million crowns.

Adjusted for the one-off items, net profit jumped 25 percent to 4.30 billion crowns and operating profit rose 12 percent to 5.92 billion, the company said.

SHUTDOWNS

Unipetrol is 63 percent-owned by top Polish refiner PKN Orlen , which said on Thursday its full-year 2006 net profit halved to 2.3 billion zlotys ($777 million).

Unipetrol forecast strong results for January-August but cautioned overall 2007 profits would suffer from production halts required by plant upgrades in the remainder of this year.

"During the first 8 months of this year we expect significant year-on-year results growth thanks to ongoing very good operating performance," Chief Executive Francois Vleugels told a news conference.

Between September and December, the firm plans to close the Litvinov refinery of its Ceska Rafinerska subsidiary for up to 60 days, the petrochemical Chemopetrol unit for 45 days, and the Paramo refinery for 21 days.

Unipetrol has said it will invest around 4 billion crowns this year, mainly into raising capacity. ((Writing by Marek Petrus; Editing by David Cowell; Reuters Messaging: rm://marek.petrus.reuters.com@reuters.net; e-mail: prague.newsroom@reuters.com or marek.petrus@reuters.com; Tel: +420 224 190 477))

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Keywords: UNIPETROL RESULTS/