Press releases

Consolidated net profit of Ciech Chemical Group after two quarters of 2008 amounted to PLN 125 million, and revenues to PLN 2 billion 61 million. The results are consistent with prior assumptions.

After six months revenue projections for the current year have been fulfilled in 48%, and net profit forecast in 56%. “We cannot see any threats to the financial forecast for 2008, and therefore we maintain that we will fulfill it”, says Ryszard Kunicki, Member of the Management Board of Ciech, who manages the activities of the Group and the Company. This year the Group’s revenues are expected to reach PLN 4 billion 270 million, and net profit – PLN 225 million.

In the first half of the year, EBIT increased by 4.7% to reach PLN 226.4 million (in comparison with the first six months of 2007), and EBITDA rose by 9.2% to amount to PLN 333.9 million. “Performance indicators generated by us are consistent with the Group’s strategy. Therefore, we have solid foundations for further development. Moreover, in the next quarters we shall experience the positive effects of investments in our companies and their integration”, says Kazimierz Przełomski, Vice-President of Ciech, who is responsible for supervising the Group’s finances. In spite of satisfactory performance indicators, the Group’s results were adversely affected by significant strengthening of the zloty against the euro and the dollar, increase of raw material prices, growth of transportation services costs, rise in remunerations in some companies, and price/demand fluctuations with respect to certain organic products.

Ciech focuses on the development of the Agro Division

Ciech maintains its interest in prompt development of the Agro Division.  In the first half of 2008 it was one of the fastest growing segments of activity of Ciech Chemical Group. In comparison with the first half of 2007, revenues from sales of agrochemical products increased by 36% to reach PLN 417.3 million, and gross sales result amounted to PLN 129.4 million (i.e. also rose by 36%). “We think that the conditions on the agrochemical products market will remain stable for the next few years. Therefore, we wish to develop the Agro Division. We are particularly preoccupied with taking over control of Zakłady Azotowe in Tarnów (Tarnów Nitrogen Plant) and Zakłady Azotowe in Kędzierzyn (Kędzierzyn Nitrogen Plant). Ciech has all the tools to become the integrator of companies belonging to the sector of Great Chemical Synthesis”, says Ryszard Kunicki. At present, Ciech holds 6.5% of shares in Tarnów Nitrogen Plant.

Integration activities produce effects

For over a year Ciech Chemical Group has been carrying out intense integration works, the aim of which is to improve the results of the individual divisions. In the case of the Organic Division (consisting of Zachem from Bydgoszcz and Organika-Sarzyna from the Podkarpacie region), integration activities in the first half-year generated financial effects in the form of PLN 36.5 million. Until 2011 Ciech expects to reach PLN 124 million on saving, synergy, and investments resulting from integration of the Organic Division.

In the near future, at Organika-Sarzyna a new system for manufacturing polyester resins, increasing the plant’s capacity by an additional 10 thousand tons of resins a year, which shall have a positive influence on the company’s results. At Zachem, on the other hand, a project is being carried out, the aim of which is to increase TDI production to the level of 75 thousand tons a year. Ciech expects the projects to allow further improvement of the Group’s results.

Ciech also carries out integration activities in other divisions. For this year, the Soda Division took over soda sales contracting from the Romanian plant, US Govora, owing to which the price of that product is at a satisfactory level. Moreover, the Romanian plant is increasing production, which means that the manufacturing cost of a ton of soda in Govora are dropping. Increased soda production is also planned by the German company belonging to Ciech, Sodawerk Stassfurt.