News Parkiet

Equity markets

Central European stocks slide

WIG20 blue chip index fell 2.44 percent to close at 1964 points yesterday amidst growing pessimism towards emerging markets, currency fluctuations and more political uncertainty. Among the biggest movers, PKN Orlen oil group lost 3.55 percent while shares of the national phone company Telekomunikacja Polska plunged 2.4 percent after its workers voted overwhelmingly to go on strike against planned job cuts.

Pharmaceuticals

Bioton up 18.9 pct. on IPO

Shares of Bioton SA, Poland's first biotechnology stock to go public, begun trading at 3.27 zloty yesterday despite massive sell-off on the Warsaw stock exchange. Earlier this month maker of recombination human insulin sold 16 million shares at 2.75 zloty each.

Bioton co-founder, Polish businessman Ryszard Krauze, said the company will aim to increase its global market share to 5 percent within two to three years, boosting sales to 1.5 billion zloty.

Insurance

PZU reports 2004 earnings

Powszechny Zakład Ubezpieczeniowy, Poland's biggest insurance group, said its profits surged 61 percent last year, boosted by an increase in premiums made possible by the expanding Polish economy and higher living standards. Net income jumped to PLN 2.19 billion ($720 million), chief executive Cezary Stypułkowski, a former Citigroup manager in Poland said. Overall premiums were up 5 percent to as much as 12.9 billion zloty, Warsaw-based insurer said.

PZU also said it plans to pay half of last year's earnings as dividends. PZU itself, without its life insurance unit and other subsidiaries, reported earnings of 1.41 billion zloty.

Equity markets

Corporations unwilling to make provisions for invoices

At least some publicly traded firms fudge their sales figures by using an aggressive accounting tactic and booking their 'return invoices' as revenue, two major auditors told PARKIET this week. Return invoices are special invoices that give buyers the right to send back goods received months after the delivery.

In theory, corporations that use this instrument should make a special provision for all potential refunds, but not all firms follow this rule.

Companies that use this controversial practice include WSiP textbook publisher and Inter Cars auto parts distributor.

Media

Cinema City takes 1.76 million euro charge

Cinema City International, an Israeli movie theater operator with extensive operations in Central Europe, wrote off the cost of last December's failed Initial Public Offering on the Warsaw stock exchange. CCI said it took a 1.76-million euro charge because it isn't sure when it will be able to go back to the market to raise money for expansion. Cinema City called off its IPO at the last moment citing insufficient demand for stock that would guarantee enough liquidity on the Polish bourse.

Despite the charge, CCI reported earnings of 5.3 million euros, up 48.6 percent from 2003. Revenues totaled 99 million euros, while EBITDA rose 35 percent to 21.4 million euros.

Civil engineering

Minority alliance at Mostostal Płock dissolved

A coalition of minority investors at Mostostal Płock building group decided to end their formal alliance after the company said it would use its massive cash hoard for dividends and stock buybacks. The stock doubled in value since the Association of Individual Investors accumulated 15 percent stake in the company and begun prodding Mostostal to pay more attention to minority interests. Mostostal, a part of Spain's Acciona group, said it plans to spend 10 million zloty, or $3.4 million on dividends and buybacks.

Footwear industry

CCC sees stronger earnings

Footwear manufacturer CCC is expecting an increase in net margins as it completes planned expansion of company retail outlets this year. CCC, a major retailer of lower-end, Chinese-made shoNet margins are set to rise from 8.6 to almost 10 percentage points. It plans to spend more than 10 million zloty to open 40 new stores in Poland and in the Czech Republic to achieve sales target of 325 million zloty.

Privatization funds

NFI Foksal begins share buyback

NFI Foksal begun its 149-million zloty stock buyback today. The auction for 25 percent of outstanding shares, at 27.8 zloty a share, runs until March 25.