*Sees H2 "not bad," but margins below 2007
*Unable to set target due to unpredictable market conditions
By Jan Korselt
PRAGUE, Sep 11 (Reuters) - Czech oil processor Unipetrol
<> has seen margins pick up in the current quarter,
although they are still below last year's level, the company's
Chief Financial Officer said on Thursday.
CFO Wojciech Ostrowski told Reuters in an interview he
expected the second half of the year "would not be bad", but was
unable to give any targets due to extremely volatile oil prices.
"In absolute terms, the comparison between second quarter
and third quarter should be better... The margins are better,
although not as good as in 2007," Ostrowski said. "But September
is slightly worse than August."
In the second quarter, Unipetrol posted an 80 percent
year-on-year drop in the net profit to 302 million crowns
($17.10 million), after an 81 percent rise in the price of
Russian crude, which squeezed margins especially for
petrochemicals, usually the company's key profit driver.
In the last two months, oil has retreated from all-time
highs hit in July, easing the pressure on downstream firms.
Unipetrol originally targetted an operating profit of 4.8
billion crowns this year, though the firm said in August it
could not guarantee the goal would be met, after a weak first
half.
"This target was from November of 2007, we should not keep
this figure as something that we are trying to achieve,"
Ostrowski said.
"It is very difficult at this moment to talk about figures.
This market is more unpredictable than ever before," he said.
He said the firm planned adjusting its product portfolio to
cope with the adverse market conditions, especially in the
plastics segment, where margins have not yet recovered.
Unipetrol shares have dropped by 42 percent this year,
underperforming Prague bourse's PX index <>, which has lost
28 percent from January.
BUYBACK NOT ON AGENDA NOW
Ostrowski said plans for buyback of up to 10 percent of
Unipetrol's shares were temporarily dropped after shareholders
agreed a dividend of 3.2 billion crowns ($181.2 million) this
year. He added the firm had still room to borrow to enable it to
buy back its own shares.
PKN, 63 percent owner of Unipetrol, opted for a dividend --
the first since 1998 -- despite management's preference for a
buyback after the Polish company was itself pushed for a
dividend payment of $320 million.
Ostrowski said a share repurchase could be discussed again
at the next annual meeting, usually taking place in June.
"We can imagine that in the first half of next year, we will
come back to such discussion with shareholders," he said.
Ostrowski refused to confirm or deny Czech media reports
that Unipetrol was negotiating with Shell Oil <RDSa.L> to buy
its 16.3 percent stake in refiner Ceska Rafinerska, already 51
percent owned by Unipetrol.
However, he reiterated the firm's long-lasting interest to
raise its stake in the biggest Czech refinery.
He said cash-rich Unipetrol did not see any other imminent
acquisition targets in the region.
(Editing by Erica Billingham)
