Poland's PKN Orlen sees better earnings, no surprises on one-offs in Q4

WARSAW (Thomson Financial) - Fourth-quarter earnings at Poland's largest oil company PKN Orlen should improve on a year ago thanks to roughly stable market conditions, although it is still awaiting final refining results, its investor relations chief said today.

Speaking after PKN's Czech unit warned its fourth-quarter results were 'terrible' thanks to poorer margins and plant shutdowns, Dariusz Grebosz said the Polish refiner had no other exceptional items to report apart from those the company has already flagged.

PKN has said it would book an additional 70 mln usd from shutdowns at its Lithuanian refinery Mazeikiu in the fourth quarter, while upgrade costs at Unipetrol will further depress the bottom-line.

'Rather it should be better than the 160 mln (pre-tax profit) a year earlier,' Grebosz told Thomson Financial News by phone, saying that the refining unit was still to close its books for the fourth quarter.

'We have no one-offs that have not been announced already. The main deciding factor will be the macro environment (which) was not perfect, but did not differ much from what we saw in the same period of 2006,' Grebosz said.

PKN shocked markets in the third quarter with a last-minute announcement of asset write-downs, which forced analysts to revise forecasts and forced net profit down 42 pct compared to a year earlier.

It had a net profit of 76 mln zlotys on 13.12 bln in sales in the fourth quarter of 2006. It publishes fourth quarter results on February 28.

Grebosz said the retail segment was 'still going strong' in the fourth quarter, while results from its petrochemical unit will improve after being depressed by exceptional items a year earlier.

Company earnings in recent quarters have been plagued by a string of write-offs and the costs of maintenance shutdowns related to acquisitions in the Czech Republic and Lithuania.

Source:By Piotr Skolimowski, www.forbes.com