News Parkiet

Petrochemicals

Orlen rejects

government charges

Board of directors of PKN Orlen oil refinery had every right to expand its search for new CEO beyond candidates picked by Korn/Ferry recruitment agency, the company said yesterday after Treasury officials criticized its choice of Jacek Walczykowski, himself a board member.

Today?s special shareholders? meeting is expected to pick two new board members designated by the Polish government, as it tries to reassert its control over the country?s largest oil conglomerate.

Company watchers speculate the new board of directors could try to replace senior managers running the refinery, including Walczykowski himself as early as Thursday.

In a separate development, PKN Orlen oil refinery said is looking for a place to start extracting its own oil, chief executive Jacek Walczykowski said.

Sources close to the situation told PARKIET Orlen, which is 28 percent state-owned, may try to gain direct access to oil fields. PKN said it would make the decision on the expansion of its upstream operations ?within months?.

Public finances

Poland may cut bond

sales by 10 pct.

Polish government may limit this year?s sales of new Treasuries by as much as 10 percent Finance Minister Mirosław Gronicki said yesterday.

Poland said earlier it would sell 60 billion zloty worth of short-term bonds plus 81 billion zloty in long-term government debt and another 10.1 billion in sales on the international markets.

Metals

Stalprofil has another

record quarter

Shares of Stalprofil SA, a steel trading company from Poland?s main industrial region in Upper Silesia, rose 4.9 percent to close at 140 zloty, matching its previous all-time high earlier this year, after the firm reported record second quarter earnings yesterday.

Stalprofil, which is part owned by steel trade unions and by Polish unit of LNM Group steel-maker, said it earned 15 million zloty in the three months to July.

Quarterly earnings per share more than doubled to PLN 8.62 zloty.

Revenue was down 22 percent to PLN 159 million because Stalprofil reduced low-margin sales of metallurgical coke to Ispat Stal Polska. Export sales rose 46 percent to PLN 41 million, or just over a quarter of the total.

?For now, all I can say is that we are on target to meet our annual projections. However, we may raise our earnings forecast once our financial results for the next few months are in?, Stalprofil CFO Arkadiusz Kaliński says.

Stalprofil said earlier it expects net earnings of PLN 40.6 million ($11.1 million) on sales of 707.7 million zloty.

Banking

Still no news

on BGŻ stock sale

Shareholders interested in buying an equity stake in Bank Gospodarki Żywnościowej, a state-owned bank that specializes in lending to farmers and food processing industry, have once again postponed final decisions on the purchase of state-owned bank because of summer holiday period.

BGŻ is planning to raise its initial equity by as much as 500 million zloty by the fall of this year. Two groups led by financial investors and by other banks are reportedly considering bids for BGŻ.

Information Technology

Ster-Projekt calls off acquisitions after

disappointing 1H

Ster-Projekt SA, a mid-sized IT services company whose shares are listed on the Warsaw Stock Exchange, scaled down its expansion plans after a 10.3 million zloty lost in the first six months of this year forced the company to restructure its operations.

First-half sales at the Warsaw-based computer firm were down almost 30 percent to PLN 123 million ($33.7 million).

Last fall Ster-Projekt raised some 70 million zloty in a secondary offering to finance planned acquisitions and other projects.

?The market for IT services is very weak right now. Our competition is getting stronger and big IT projects are being pusSmólski, who owns 5.54 percent of the company warns that his company could post its first annual loss since it begun trading on the WSE if the situation doesn?t improve soon.

He denied rumors he is planning to step down after as CEO. Chief financial officer left the firm in early July.

Ster-Projekt is already down about 46 percent since May after the company admitted in its annual report that last year?s earnings overstated by a one-time sale of custom-made software to an unnamed client.