(Adds CEO, analyst comments, details, background)
By Jan Korselt and Martin Dokoupil
PRAGUE, May 15 (Reuters) - Czech oil processor Unipetrol
<> disappointed the market as higher raw material
prices hit first-quarter results, but confirmed its full-year
profit guidance despite forecasting a tough market environment.
The group's net profit plunged 74 percent to 405.7 million
crowns ($25.15 million) in January-March, well below the 655
million average estimate in a Reuters poll of nine analysts, as
high oil prices hit its margins. []
Costly raw materials took 1 billion crowns off first-quarter
EBIT in the petrochemical segment and 313 million off refining.
Earnings before interest and tax (EBIT) at the firm,
majority-owned by Poland's PKN Orlen <PKNA.WA>, tumbled 72
percent to 653.4 million in the first three months of 2008.
But Chief Executive Francois Vleugels said the full-year
EBIT target of 4.8 billion crowns was still in reach.
"We still expect to achieve the guidance but we will have to
work hard," Vleugels told a news conference. "We see continuous
challenging environment but still expect to achieve the figure
this year."
"Our view of the EBIT forecast has changed to stable, from
optimistic in the previous quarter," said Chief Financial
Officer Wojciech Ostrowski.
Unipetrol said in March the EBIT outlook was rather
conservative, as the company had expected a rebound in margins.
The company forecast that adverse macroeconomic and market
conditions will affect its results also in the coming quarters,
and Vleugels said he saw no substantial revival next year if oil
prices remain volatile and the dollar stays at current levels.
Oil rose to $125 a barrel on Thursday <CLc1>, while the
greenback fell against the euro <EUR=> after strong German
economic growth data.
"The high oil price is a problem, but... I still believe the
management forecast that they can keep up the operating profit
guidance for the whole year," said Philipp Chladek, an analyst
at Raiffeisenbank in Vienna.
"I think that the petrochemical prices will catch up in the
same extent (in following quarters)... Despite the current
macroeconomic conditions petrochemical demand will stay high in
eastern Europe," he said.
The stock fell 2 percent to 260.40 crowns by 1340 GMT,
underperforming Prague's benchmark index <> index, which rose
0.6 percent.
The firm, worth nearly $3 billion, also said it saw higher
refining margins and utilisation, and continued strong retail
momentum in the second quarter. It also expects no major output
interruption for the rest of the year.
The firm reiterated a decision will be made by June about a
possible share buy-back or dividend payment, if is does not find
adequate acquisition targets.
Ostrowski added Unipetrol's board preferred a share buy-back
to dividend payments. The shareholders are yet to decide on
distribution of the 2007 net profit of 1.22 billion.
(Writing by Martin Dokoupil; Editing by Louise Ireland)
