Polish metals, chemicals Boryszew's Q4 results decline on polymer sector

Polish listed chemical firm Boryszew's fourth-quarter financial result and operating figure were weighed down by the polymer sector, acting Chief Financial Officer Piotr Szeliga told reporters at a press conference Thursday.

"[D]espite good financial results of [Boryszew's metals unit] Impexmetal, the fourth-quarter results are weaker," said Piotr Szeliga.

"The main reason for the situation are problems in the polymer sector."

Boryszew Thursday reported consolidated net loss of PLN 46.5 in the three months to December, versus PLN 80.6 mln net income in the year-earlier period. Revenues rose 55% year-on-year (y/y) to PLN 1.2 bln.

Boryszew's operating income was down as much as 97% to PLN 2.4 mln, versus PLN 73 mln a year earlier.

The polymer segment dragged down the result, as rising raw-material prices and overcapacity combined to bring about losses.

In the unfavorable environment, Boryszew decided to disinvest its German polyester unit Kuag Elana. Boryszew took a PLN 41 mln write-down on the asset sale. Kuag Elana was established by Boryszew in 2005, after acquisition of an organized part of Kuag Oberbruch plant from the bankruptcy trustee.

Separately, the Q4 net figure was influenced by a PLN 16 mln write-down on a stake in bio-fuels firm Skotan, Szeliga said.

For the full-year 2006 period, Boryszew reported consolidated net figure down 62% y/y to a loss of PLN 47.7 mln from PLN 124.8 mln in profit against a 187% increase in revenues to PLN 5.4 bln from PLN 1.9 bln the prior year.

The consolidated 2006 operating income advanced 30% to PLN 149.9 mln from PLN 115.4 mln the year-earlier period.

Annual figures were boosted by the aluminium business with record high results of Boryszew's metal unit Impexmetal reported for the fourth quarter 06.

"The Impexmetal group is the largest value driver," said Piotr Szeliga Thursday.

Impexmetal saw a 379% y/y increase in consolidated net profit to PLN 57.3 mln for the three months to December from PLN 11.9 mln, whereas consolidated revenues grew 39% to PLN 971 mln from PLN 697.5 mln.

"Sales increase reflects not only a rise in volume but also a very big growth in metal prices," according to Szeliga.

For operating earnings, Impexmetal group reported 332% growth to PLN 56.5 mln for the fourth quarter from PLN 13.1 mln the year-earlier period.

Boryszew expects the aluminium division to remain its key driver this year with sales rising on benefits from the restructuring plan, established in May 2006 and being realized since than, and an investment program of PLN 230 mln for 2005-2007 that should help to boost sales to 130,000 tonnes annually in 2008, according to Rafal Swistak, Boryszew's proxy.

Boryszew is also looking for a continued increase in metals prices in 2007 and European Commission will finally decide in favor of a cut in duties for aluminium to 3% as of the second quarter of year from 6% currently.

"We think that in the first quarter the current level [in costumes for aluminium] will be maintained," said Szeliga. "But a cut could be decided in the second quarter."

Boryszew did not include potential costumes cut in its budgetary draft for 2007.