PKN Orlen says impairment to weigh on Q1 unconsolidated results

MOSCOW (MRC) -- Poland's biggest oil refiner, state-run PKN Orlen recognised an impairment charge of 517 million zlotys (USD133.88 million) in its unconsolidated first-quarter financial results, related to the share value of unit ORLEN Lietuva, PKN said.

The impairment will not have an impact on PKN's consolidated results that will be published on April 27, the company said.

"The reason to conduct impairment tests of ORLEN Lietuva shares, which result in the abovementioned impairment, is the pay-out of dividend by ORLEN Lietuva to PKN ORLEN in the amount of around 591 million zlotys in the first quarter," the company said in a statement.

PKN is expected to report a 466 percent year-on-year rise in first quarter net profit.

As MRC informed earlier, PKN ORLEN signed a contract with Saudi Aramco for the supply of ca. 200 thousand tonnes of crude oil monthly to its refineries.

PKN Orlen is a major Polish oil refiner and petrol retailer. The company is a significant European publicly traded firm with major operations in Poland, Czech Republic, Germany, and the Baltic States. It currently (2015) ranks 353, with a revenue of over USD33.8 billion.
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Clariant Q1 sales, operating profit beat expectations

MOSCOW (MRC) -- Clariant's first-quarter sales and operating profit beat expectations as the Swiss chemicals maker said it was bolstered by acquisitions and robust demand in regions including Europe, Asia and North America, said Reuters.

Sales rose 9 percent in local currency to 1.6 billion Swiss francs (USD1.61 billion), it said in a statement, ahead of the average analyst estimate of 1.56 billion francs in a Reuters poll.

Operating profit before exceptional items rose 10 percent to 250 million francs, above the 235 million franc poll estimate.

Clariant has been helped by acquisitions including in the United States that added 3 percent to sales and by strong demand for products in its plastics and coatings and care chemicals division that supplies ingredients for soaps and consumer products.

The company confirmed its 2017 outlook, which calls for continued local currency growth, progression in profitability and operating cash flow generation.

"Our focus on local currency growth and profitability improvement is clearly reflected in these encouraging results," Chief Executive Hariolf Kottman said.

"We are on a solid path towards achieving our sales expansion targets, a continued progression in absolute EBITDA and EBITDA margin before exceptional items as well as operating cash flow generation, in spite of what continues to be a challenging market environment in specific business areas."

Clariant also stuck to its mid-term target of an EBITDA margin before exceptional items in the range of 16 percent to 19 percent and a return on invested capital (ROIC) above the peer group average.

As MRC informed before, in June 2016, Clariant inaugurated its new production plant for water-based pigment preparations in Mexico. The new plant located in Santa Clara doubles Clariant’s Mexico annual production capacity for water-based pigment preparations and enhances its ability to serve customers across North and Latin America.

Clariant AG is a Swiss chemical company and a world leader in the production of specialty chemicals for the textile, printing, mining and metallurgical industries. It is engaged in processing crude oil products in pigments, plastics and paints. Clariant India has local masterbatch production activities at Rania, Kalol and Nandesari (Gujarat) and Vashere (Maharashtra) sites in India.
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Saudi Aramco says to set up new chemicals unit

MOSCOW (MRC) -- Saudi Aramco plans to set up a new chemicals subsidiary, the company said in its official magazine, The Arabian Sun, on Wednesday, as per Hydrocarbonprocessing.

"The Board approved the creation of a new subsidiary to conduct the company's chemicals business," Aramco said. It did not give further details in the weekly in-house publication.

Aramco's board met last week in Shanghai to discuss the company's plans and appointed a new downstream head as well as several vice presidents in other key positions.

Abdulaziz al-Judaimi was named as senior vice president for downstream operations.

Downstream, covering refining and chemicals, is an important area for the company as it diversifies operations as it prepares for an initial public offering (IPO) next year, when around 5% of the firm is expected to be listed in Riyadh and on other international bourses.

Last year, Judaimi, then business line head for downstream, said Saudi Aramco aims to almost triple its chemicals production to 34 MMtpy by 2030.

Over the same period Aramco's global refining capacity target is to raise it to 8 MMbpd–10 MMbpd from more than 5 MMbpd now.

Developing petrochemicals is part of the kingdom's major economic reform plan, known as Vision 2030, which aims to diversify the economy away from oil.

This will also help Aramco boost value from hydrocarbons by securing revenue streams and become less vulnerable to oil price swings.

The oil giant is planning to develop a massive oil to chemicals project with Saudi Basic Industries Corp which industry sources say will cost more than USD20 B.

As MRC wrote previously, in June 2016, Saudi Arabian Oil Co. and Saudi Basic Industries Corp. (Sabic) became one step closer to building their first plant to process crude directly into chemicals, cutting out a link in the production chain from hydrocarbons to the finished products that go into plastics and other consumer goods. The state-owned companies signed an agreement to study such a project to be located in Saudi Arabia. A joint venture is possible if the companies decide to move ahead after the study is completed by early 2017, they said. Oil companies normally refine crude into transportation fuels including gasoline and diesel and leave byproducts such as naphtha to be processed separately into chemicals.

Saudi Aramco is an integrated oil and chemicals company, a global leader in hydrocarbon production, refining processes and distribution, as well as one of the largest global oil exporters. It manages proven reserves of crude oil and condensate estimated at 261.1bn barrels, and produces 9.54 million bbl daily. Headquartered in Dhahran, Saudi Arabia, the company employs over 61,000 staff in 77 countries.
MRC

PTTGC plans to shut LLDPE plant in Thailand for maintenance

MOSCOW (MRC) -- PTT Global Chemical (PTTGC) is likely to take off-stream its linear low density polyethylene (LLDPE) in Map Ta Phut, as per Apic-online.

A Polymerupdate source in Thailand informed that the company has schedule to shut the plant in June 2017 for maintenance. The plant is slated to remain off-line for around 4 weeks.

Located at Map Ta Phut in Thailand, the plant has LLDPE production capacity of 400,000 mt/year.

As MRC informed before, PTT is on track to start commercial operations at its new 400,000 mt/year metallocene C6 linear low density polyethylene plant at Map Ta Phut, Thailand, in the first quarter of 2018. PTT will start up the plant by the end of this year.

PTT currently has a total capacity of 800,000 mt/year of high density polyethylene (HDPE), 300,000 mt/year of low density polyethylene (LDPE) and 400,000 mt/year of LLDPE at the same site.

PTT Global Chemical is a leading player in the petrochemical industry and owns several petrochemical facilities with a combined capacity of 8.45 million tonnes a year.
MRC

BASF Q1 operating profit up 29% on petrochemicals

MOSCOW (MRC) -- Germany's BASF, the world's largest chemicals group by sales, posted a stronger-than-expected gain in quarterly operating profit on strong demand for its basic petrochemicals such as precursor materials for insulation foam, said the company on its website.

BASF Group’s sales rose by 19% in the first quarter of 2017 to EUR16.9 billion. In all segments, the positive volume trend seen in previous quarters was maintained and led to growth of 8% in sales volumes. Furthermore, BASF achieved significantly higher sales prices (up 8%), especially in the Chemicals segment. Currency effects and the Chemetall business acquired from Albemarle in December 2016 also contributed to the increase in sales.

BASF Group’s income from operations (EBIT) before special items was 29% higher at EUR2.5 billion. Of this amount, EUR2.0 billion was generated by the chemicals business, which comprises the segments Chemicals, Performance Products and Functional Materials & Solutions. Earnings in the chemicals business thus grew by 37%.

BASF received an initial insurance payment of EUR100 million in connection with the accident that occurred at the North Harbor in Ludwigshafen last October. Around three-quarters of this amount was recognized in the Chemicals segment.

EBIT grew by EUR585 million to EUR2.5 billion compared with the first quarter of 2016.

Net income rose by EUR322 million to EUR1.7 billion. Earnings per share were EUR1.86 in the first quarter of 2017, compared with EUR1.51 in the same quarter of 2016. Adjusted for special items and amortization of intangible assets, earnings per share amounted to EUR1.97 (first quarter of 2016: EUR1.64).

As MRC informed earlier, the European Commission has approved under the EU Merger Regulation the acquisition of the industrial coatings business of German chemicals company BASF by AkzoNobel of the Netherlands.

BASF is the largest diversified chemical company in the world and is headquartered in Ludwigshafen, Germany. BASF produces a wide range of chemicals, for example solvents, amines, resins, glues, electronic-grade chemicals, industrial gases, basic petrochemicals and inorganic chemicals. The most important customers for this segment are the pharmaceutical, construction, textile and automotive industries. BASF had sales of over EUR74 billion in 2014 and over 113,000 employees as of the end of the year.
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