Unipetrol's Management Board hereby announces its estimates of the selected financial and operating data of Unipetrol Group for the second quarter 2010.

Reg. Announc. 18/2010

1) Spread fwd Brent Dtd vs Ural Rdam = Med Strip - Ural Rdam (Ural CIF Rotterdam)
2) Unipetrol model refining margin = revenues from products sold (97% Products = Gasolines 17%, Petchem feedstock 20%, JET 2%, Diesel 40%, Sulphur Fuel Oils 9%, LPG 3%, Sulphur 1%, Other feedstock 5%) minus costs (100% input = Brent Dated); products prices according to quotations.
3) Unipetrol model petrochemical olefin margin = revenues from products sold (100% Products = 40% Ethylene + 20% Propylene + 20% Benzene + 20% Naphtha) minus costs (100% Naphtha); products prices according to quotations.
4) Unipetrol model petrochemical polyolefin margin = revenues from products sold (100% Products = 60% HDPE + 40% Polypropylene) minus costs (100% input = 60% Ethylene + 40% Propylene); products prices according to quotations.
5) Quarterly average foreign exchange rates by the Czech National Bank.

Source: ICIS, PLATTS, FERTWEEK, THOMSONREUTERS, CNB

1) LPG, gasoline, naphtha2) JET, diesel3) Fuel oils, bitumen

1) Includes retail distribution - Benzina

Management Board commentary regarding preliminary operating and macroeconomic data for the second quarter 2010: 

The crude price oscillated largely between USD 70-85 level during the second quarter 2010 with average quarterly crude price increasing by 3% quarter-on-quarter. The B-U price differential remained stable till mid-May but deteriorated towards the end of the quarter, nonetheless the average B-U price differential widened to almost USD 1.8 per barrel, level similar to fourth quarter 2008. Margins in refining slightly dropped quarter-on-quarter, while petrochemical further strengthened and combined reached average levels seen before the crisis. The CZK weakened quarter-on-quarter against the USD, which was positive for refining segment, while remained flat against the EUR and USD/EUR cross exchange rate development thus once again did not help to improve financial performance of the petrochemical segment of the Unipetrol Group. 

Refining

The main factors that influenced the quarter-on-quarter performance of the refining segment in the second quarter 2010 were: widening of B-U price differential by 25% (positive), higher crude oil throughput by 14% (positive), weaker CZK against the USD by 7% (positive), LIFO effect (positive), lower refining margin mainly due to somewhat weaker gasoline, LPG and naphtha spread (negative), higher demand for fuels connected with improving macroeconomic conditions, export activities, lack of adverse weather conditions as in 1Q2010 as well as maintenance shutdowns in competitive refineries in Slovakia and Austria (positive). 

Petrochemicals

The main factors that influenced the quarter-on-quarter performance of the petrochemical segment in the second quarter 2010 were: higher olefin as well as polyolefin margin by 14% and 9% respectively mainly due to better propylene and polypropylene spreads (positive), very good sales volume of olefins and benzene, due to regular maintenance shutdowns and outages of several plants in Europe (positive), higher demand for ethylene/polyethylene combined by 26% and overall for petrochemical products by 4% (positive), LIFO effect (negative), weaker EUR against the USD by 8% (negative). 

Retail Distribution

The main factors that influenced the quarter-on-quarter performance of the retail segment in the second quarter 2010 were: unit margins remained stable on above average levels (neutral), improved demand with the run up of main motorist season (positive), improving sales of premium fuels (positive), and ongoing negative price difference to neighbouring countries offsets improvement in transit transportation (negative). 

Management Board estimates

Unipetrol’s Management Board estimates that the reported EBIT of the Unipetrol Group in the second quarter 2010 will bepositive and better than the EBIT reported by the Unipetrol Group in the first quarter 2010.

In LIFO calculation EBIT is estimated to be also positive but over CZK 100m less than the reported EBIT for the second quarter 2010. 

Development of foreign exchange rates is estimated to influence negatively the result of the Unipetrol Group by approximately CZK 100m. 

The financial information published in this report is estimated and the values may differ from the values which will be published on 31 August 2010 in Unipetrol’s consolidated financial statements and/or the presentation for the second quarter 2010.

In Prague, on 29 July 2010

Management Board of Unipetrol
and
Investor Relations Department
Unipetrol, a.s.
Na Pankraci 127, 140 00 Prague
Czech Republic
Tel.: +420 225 001 417
E-mail: ir@unipetrol.cz
www.unipetrol.cz