Refinery operator Unipetrol posted its worst two-day slump in more than six years as speculation mounted that a fire that shut down the company’s ethylene unit may curb earnings.
The shares fell 5.3% Friday after the Czech refiner said it needs several days to assess the length of the outage at its Litvinov facility and the impact on financial results.
The fire prompted the shutdown of the petrochemical unit, while the output of its oil refinery there was reduced to “a minimum,” Unipetrol said.
The disruption at Litvinov comes at a time when Unipetrol was benefiting from accelerating Czech economic growth that helped push its second-quarter profit to a record.
The company previously said that shutdowns of the same ethylene unit in June and July, each lasting about one week, would reduce earnings before interest, taxes depreciation and amortization by a combined 270million koruna ($11million).
“We expect the shutdown will last for months with huge impact on Unipetrol’s numbers,” said Bohumil Trampota, an equity analyst at J&T Banka AS in Prague
“The incident unfortunately occurred during a very favorable macro environment.”
J&T owns 23.7% of Unipetrol, making it the biggest shareholder after Poland’s PKN Orlen SA with a 63% stake.
Later on Friday, Unipetrol said the accident represented a “force majeure,” the continuation of which “makes it impossible” for the Litvinov facility to meet its contractual obligations toward business partners.
The stock slumped 10% in two days to 170 koruna, paring its rally this year to 30% and valuing the company at 30.8billion koruna.