Hungarian polyolefin and petrochemicals producer Tisza Chemical Group (TVK, Tiszaujváros / Hungary; www.tvk.hu) has published preliminary financial figures for the first half of 2008, reporting an operating loss of EUR 11.2m, compared with an operating profit of EUR 79.8m in the same period of 2007. Sales in the first six months increased by over 10% year-on-year, reaching EUR 713m. The company said that neither polymer or olefin prices followed sharp increases in feedstock prices and that this, combined with higher energy costs, had led to margins plummeting in the second quarter of the year to the point where they did not cover operating costs. The poor result was compounded by foreign exchange losses due to the appreciation of the forint against the euro.

TVK CEO Árpád Olvasó said that in light of the unprecedented cost increases, “we have been and will only be able to compensate partially for the drastic negative effect of these factors by applying a series of predetermined cost saving measures, by reducing or rescheduling our capital expenditure and other steps designed to curb losses.”

Production and sales volumes for PP increased by 5% and 6% respectively in the first half as the PP products offered a relatively higher margin than PE, the company said. It reduced the production and sales of PE by 4% and 1% respectively.

TVK said that it refused to use expensive atmospheric gas oil (AGO) during May and June 2008 to avoid additional losses and could not replace the AGO with less expensive naphtha. It also brought forward maintenance on its Olefin-1 and PE plants to June from the third quarter of 2008.

e-Service:
TVK annual report H1 2008 as a PDF document (223 KB)