Unipetrol Reports First-Quarter Profit on Rafinerska Deal

Unipetrol AS, the largest Czech refiner, reported the first quarterly profit since 2012 after increasing its stake in Ceska Rafinerska AS and improving petrochemical and retail sales.

Net income in the three months through March rose to 937 million koruna ($47 million) from a loss of 148 million koruna a year earlier, the Prague-based company said today in an e-mailed statement. Adjusted for the January acquisition of Royal Dutch Shell Plc (RDSA)’s 16.3 percent stake in Ceska Rafinerska, Unipetrol posted a quarterly net loss of 249 million koruna.

The increase of the stake in Ceska Rafinerska to 67.6 percent has improved Unipetrol’s operating profitability and boosted first-quarter revenue, which rose 16 percent to 28.8 billion koruna. The petrochemical and retail segments improved profits on growing demand and new Czech legislation that has curbed illegal trade in fuel, the company said.

“Compared to a very bad situation last year, the business environment of the fuel market has partly improved,” Chief Executive Officer Marek Switajewski said in the statement.

The shares jumped 2.6 percent, the most since March 10, to 140.3 koruna by 9:40 a.m. in Prague. The stock pared its decline this year to 17 percent.

First-quarter earnings before interest, tax, depreciation and amortization rose to 1.73 billion koruna, or 540 million koruna without the Ceska Rafinerska gain, the company said. Earnings before interest and tax rose to 1.1 billion koruna from last year’s loss of 70 million koruna.

Refinery ‘Difficult’

The refining business remained “difficult,” posting a first-quarter Ebitda loss of 434 million koruna. The refining market showed first signs of improvement in March, according to the statement.

The petrochemical segment had its “best results in the last few years,” posting a first-quarter Ebitda of 997 million koruna, the company said. The retail segment had an Ebitda of 100 million koruna.

“It’s a good set of earnings, although Unipetrol’s refining is still making a large cash loss for the company,” Tamas Pletser, an analyst at Erste Group Bank AG, said in a note to clients. He has a reduce recommendation on the stock.

The remaining 32.4 percent in Ceska Rafinerska is owned by Eni SpA. (ENI) Polish refiner PKN Orlen SA controls 63 percent of Unipetrol.

To contact the reporter on this story: Ladka Bauerova in Prague at lbauerova@bloomberg.net

To contact the editors responsible for this story: James M. Gomez at jagomez@bloomberg.net Michael Winfrey, Andrea Dudik

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