Unipar posts US$87mn net profits in 2005, down 9% on year

Brazilian petrochemicals group Unipar posted net profits of 186mn reais (US$87mn) in 2005, down 9% from 204mn reais a year earlier, the company said in a statement. The decline in profits was the result of higher raw material prices and lower petrochemicals prices in 2005 compared with 2004 as well as a reduction in domestic demand for petrochemicals, the company said. The company posted gross revenue of 3.30bn reais in 2005, up from 3.14bn reais in 2004, while sales costs and operating expenses rose to 2.09bn reais in 2005 from 1.87bn reais a year earlier. Unipar's operating profits fell to 251mn reais from 309mn reais in 2004, while Ebitda fell 10% to 356mn reais in 2005, the company said. Unipar produces petrochemicals directly through its chemicals division and polyethylene producer Polietilenos União and through stakes in the following petrochemicals companies: PQU (37.2%), Polibutenos (33.3%), Carbocloro (50%), Petroflex (10%) and Rio Polímeros (33.3%). Unipar invested 319mn reais in 2005, up from 211mn reais in 2004. The group's investment in 2005 included the start of a 1.3bn-real investment program to expand capacity at PQU and Polietilenos União. The company also invested 114mn reais in the 520,000 tonne-a-year (t/y) polyethylene producer Rio Polímeros, which started production in late 2005. Unipar plans to expand output capacity at Polietilenos União to 320,000t/y by the second quarter of 2008 from the current 120,000t/y. Total investment in the project is estimated at 420mn reais. Total investments in PQU's expansion are estimated at 840mn reais. PQU has 1.38Mt/y production capacity in six different products. The expansion program aims to increase total output by 420,000t/y, including increasing ethylene production capacity 230,000t/y from 500,000t/y currently.