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TVK sinks deeper into red in Q1-Q3 despite profitable Q3

Hungarian chemical company TVK, a unit of Hungarian oil and gas company MOL, recorded net profit of HUF 1.39 billion in the third quarter of 2009, compared to losses of HUF 1.44 billion in Q3 of 2008 as operations produced a profit with improving margins and dropping energy prices and financial losses fell sharply, TVK revealed in its unaudited, consolidated IFRS report for the period on Tuesday morning.

Despite profits in Q3, TVK still sustained net losses of HUF 7.6 billion (€28.45 million) in the first three quarters of 2009. Losses rose from HUF 4.2 billion in Q1-Q3 of 2008 as operating losses doubled the lower integrated petrochemical margins, higher energy costs and lower sales and production volumes compared one year earlier.

Nine-month sales fell 27.5% to HUF 186.1 billion although they already rose a slight 0.8% yr/yr in Q3 to HUF 76.3 billion. Production was reduced by process failures in Q1 and by maintenance as well as low demand in Q2, the report said.

Q3 EBITDA rose a sharp 80.3% to HUF 5.4 billion but nine-month EBITDA, at HUF 3.4 billion, was still down 48.5% from Q1-Q3 of 2008.

Q1-Q3 operating losses doubled to HUF 6.2 billion. However, TVK posted an operating profit of HUF 2.16 billion in the third quarter of 2009, compared to operating losses of HUF 259 million in Q3 of 2008 as the price of polymer products exceeded the price increase of naphtha, the euro strengthened against the dollar and energy costs fell.

TVK generated 52% of the company's sales revenue from export sales in Q1-Q3, primarily to Germany (18%), Poland (16%) and Italy (also 16%).

Total assets stood at HUF 211.4 billion at the end of September 2009, down 2% in twelve months. Net assets fell 4% to HUF 139 billion.

TVK engaged 1,183 full-time employees at the end of the third quarter of 2009, down only 7 from a year earlier.

Hungarian oil and gas company MOL owns 86.79% of TVK, while MOL-owned Slovak oil company Slovnaft owns 8.07% of the company. (MTI-Econews)