Press releases

The largest chemical holding in Poland is actively adapting to new post-crisis operating conditions in local and global chemical markets. Securing stable financing marks a new phase in the Company’s restructuring efforts, while Ciech maintains pre-crisis revenues levels and decreases net loss, with quarterly financial results beating analyst estimates.

Macro conditions’ improvement seem to prove market revival signs recorded by Ciech in the first three months of 2010. Total industry production sold indicator grew by 9.4% yoy, while prices of production sold in the chemicals sector increased by a 2.3 %. Gradual improvements in the end client markets (autos, construction and pharmaceuticals) lead to rising demand, accompanied with price pressures.
In spite of the fact that market positive tendencies have only a small impact in a quarter long timeframe, Ciech revenues stood at levels beating analyst estimates after Q1 2010. Sales for the period reached PLN 962 million (-3% yoy), while EBITDA amounted to PLN 100,6 million (-32% yoy). The Company recorded a net loss slightly exceeding PLN 3,1 million, a 60% decrease in comparison with Q1 2009 as a result of decrease in financing costs. The emphasis put on the discipline within the working capital requirements led to a generation of a positive operating cash flows of PLN 26,2 million. Consistent efforts in implementing restructuring measures alongside with the flexibility in making the most of positive signals stemming from the raw material markets allow for Ciech’s best positioning possible in terms of future rebound in demand and rising prices environment. 

Company strategy reinforced with stable financing

Ciech management is currently intensely working on a comprehensive restructuring and efficiency improvements programme alongside with its advisors. In its first stage, the focus was on guarantying a loan agreement concerning debt consolidation and refinancing, agreed upon with a consortium of banking partners and spanning  14 major production entities as well as the Romania-based US Govora site. The agreement, reached on April 26th, 2010, is an exhaustive solution providing investment and operational financing for the Group until the end of 2011.

“The loan agreement is the next step in a consistently implemented vision of the Company’s operations. It is the Management responsibility to minimize the cyclical character of this business, which means that the best strategy for Ciech is the one that goes beyond the production cycle  and focuses on the broad trends in global markets”, says Ryszard Kunicki. “Ciech has been gathering experience in this market for 65 years now and therefore there is no reason why should it  not withstand the current turbulences”.

Organika Division regains its importance

Organika has significantly been reclaiming its role within the Group over the first three months of 2010. Revenues of the Division accounted for 37% of the entire Group sales, equalizing the contribution of Soda Division, which remained the strongest pillar of Ciech throughout the crisis. Organika’s results improved as a result of rising demand for the segment’s key products – TDI and epoxy resins.
“These results are one more proof we are now back on track, and Ciech is again backed by its two major engines, Soda and Organika”,   says Ciech’s President.

Soda’s volumes show steady rise

Despite a highly competitive environment in the soda ash markets, translating itself in price falls, Soda Division has once again surprised with rising volumes of sales, generating ca. 50% of Group’s EBITDA. In Q1 2010, Soda Division sold 445 thousand tones of the product, the highest volume recorded since 2008.
“Taking into account Division’s importance within Ciech, we are satisfied with improving efficiency of production, a direct consequence of major efforts in terms of optimizing and modernizing production sites both in Poland and abroad”, says Artur Osuchowski, Member of the Board in charge of Soda Division.
The bandpass filter, a major investment in Soda Deutschland, was recently accomplished and shall have a positive contribution to production process in the coming months.  Finally, average production costs of final products are steadily decreasing even in the Romanian site of US Govora, remaining only slightly worse than in those recorded in Polish production plants, which remain cost leaders in Europe.