The Management Board of CIECH S.A. has released the forecast of Ciech Group consolidated results with a current report no. 15/2008 dated 29 February 2008. The forecast consists of reaching consolidated sales revenue of PLN 4,270 million as well as Ciech Group consolidated net profit in the amount of PLN 225 million.
Following the analysis of Ciech Group’s key companies’ financial results for the first 9 months of 2008 and based on estimates of Ciech Group financial results for the IV quarter of 2008, the Management Board of CIECH S.A. has decided as follows:
– maintain the forecast for sales income,
– update the forecasted Group’s net financial result by decreasing it to PLN 88 million.
The main reasons for lowering the forecasted net results include:
– negative valuation of deals entered into between 27 February and 12 August 2008 with the use of derivates. The company employed optional strategies with the intent to obtain short-term gain in currency exchange rates. The size and nature of the deals cause the Ciech Group’s net profit to be highly sensitive to the changes of the PLN to Euro exchange rate, whilst not having a direct effect on Group's financial flows. Information on the subject of unsettled derivates transactions as of 30 September 2008 and on the subject of Ciech Group’s results exposure to the varying PLN/EUR exchange rate will be provided in the periodical report, which will be released 12 November 2008;
– lower than planned sales volume of TDI and EPI, epoxy resin, saturated resin, novolaks, hardeners and plant protection agents as well as a weaker economic situation anticipated for the IV quarter, regarding the abovementioned products;
– non-execution of planned results by foreign companies, which form a part of the Soda Division. In the case of US Govora, it was mainly caused by lower than planned manufacturing volume as a result of a major break down at the Romanian plant, and in reference to the German company - a considerable rise in power costs and also due to the date for the sale of the cavernrn moved forward.