Grupa Lotos expects profits to fall by half in 2005

Analysts praised the firm for its open PR policy, but at the same time are trying to assess what the impact of this profit forecast will have on its valuation before its IPO scheduled for September. "The firm cannot be judged after the results of one year. The most important are growth perspectives and the emergence of a potential sector investor, other than Orlen. If this happens, this would have a positive impact on the valuation," said Rafał Salwa, an analyst with IDM. He went on to say that one of the potential bidders might be Hungarian MOL, but the number of interested parties might be higher. "We expect a declining situation on the oil market and dropping refinery margins. Furthermore, we will have to halt production in March due to modernization works and we are investing in developing the company, which requires substantial outlays," explained Paweł Olechnowicz, president of Grupa Lotos. (Puls Biznesu, pp. 1, 8) M.M.