News Parkiet

Corporate governance

Government tightens its grip on

state-owned firms

Polish government has shown this week it may start playing a more active role in the management and supervision over state-owned firms, taking back control over PKN Orlen refinery. Treasury Minister Jacek Socha has purged Orlen?s board, forcing out non-executive directors tied to Kulczyk Holding, a private company.

Socha promised as much during panel discussion organized by PARKIET in mid-July. ?My policy is this - I?ll try to appoint Treasury employees (as board members) wherever we don?t have one already. That way I?m able to present my point of view on how to run the company as its owner or co-owner?, Socha said.

Socha and Polish prime minister Marek Belka criticized PKN for its selection of Jacek Walczykowski, himself a board member, as the new CEO just days ago. Belka, an economist from University of Łódz, said Walczykowski?s appointment ?lacked transparency? and warned that his cabinet will ?make appropriate conclusions? on how to deal with Poland?s largest oil company. Treasury Ministry and Nafta Polska privatization agency own a combined 28 percent stake in PKN Orlen.

World economy

US economy slowing down

Major indices and the US dollar fell sharply on Friday after new data by the Labor Department that showed slower than expected job growth in July. Only 32.000 new jobs were added to the payrolls during the month, a tiny fraction of the 230.000 most economists expected.

Food processing

Profi files for IPO

Profi food processing group is readying for an IPO on the Warsaw Stock Exchange, company officials told PARKIET this week. ?We?ve already filed our IPO prospectus with the Securities and Exchanges Commission. We will publish our IPO schedule once we get SEC approvals. It?s too early to get into any details right now. I?m hoping that our stock will start trading on the WSE before the year?s end?, Aleksander Wolf, advisor to Profi?s management said.

Profi, Poland?s largest maker of canned meat-pies, said it wants to raise money to expand its production capacity. Its existing owners include eight founders, each of whom has an equal stake in the company. Profi has annual sales of approximately 90 million zloty, with over 10 pct. margins.

Banking

Pekao 2Q net rises 48 pct.

Bank Pekao?s second-quarter profits rose 48 percent because of lower tax rates and higher income from fees and commissions. Poland?s second largest bank by assets said its net income rose to PLN 369 million, or 101.2 million dollars, from 249.5 million zloty last year.

Warsaw-based lender, controlled by UniCredito Italiano, had 18.7 percent Return On Equity, up 4.3 percent from the same period a year ago.

Retail

BOS, DLS to merge before IPO

BOS and DLS, two of Poland?s largest independent grocery distributors have agreed to merge their operations as they unveiled plans for an Initial Public Offering on the Warsaw Stock Exchange sometime in 2006. BOS, which operates mainly in north-western Poland and DLS from north-eastern Poland have already worked together before, setting up ProLogistyka sales platform to maximize their buying power.

The two firms have combined sales of more than 2 billion zloty, making it the second largest right after Makro Cash & Carry.

Forest products

Industry facing wood supply shortage

Polish pulp and paper industry is expecting serious shortage of wood and wood fiber later this year, PIGPD industry association said on Friday. Industry sources say they need an extra 5 million metric tons to meet the demand. Government monopoly Lasy Państwowe, which produces 90 percent of Poland?s wood says it is working as fast as it can to fill in the gap.

Real estate

GTC earnings on target

Globe Trade Centre property developer reported second-quarter earnings of 6.3 million doFirst-half operating income according to International Accounting Standards totaled 15 million dollars.

GTC?s second-quarter sales included for the first time revenue of its real estate units in Hungary. Warsaw-based developer also has early-stage projects in Romania, Serbia and the Czech Republic.