UNIPETROL Group

Preliminary Financial and Operational Highlights for 2005

February 2006

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*restated results

Unipetrol Group – Financial and Operational Results for 2005

Preliminary financial results of main subsidiaries of Unipetrol a.s.

in 000 CZK   2004 IFRS* 2005 IFRS

Chemopetrol a.s. Revenues  28,899,450 31,237,276 

  EBIT 2,743,604  3,163,848 

  Net result 1,952,507  2,642,690 

  Equity 13,033,302 14,200,524

  Total assets 28,533,029 28,385,412

Benzina a.s. Revenues 20,700,329  11,426,602 

  EBIT 487,891  -9,378 

  Net result -1,053  -499,120 

  Equity 323.532 1,123,412

  Total assets 8,323,622 7,657,185

Ceska Rafinerska a.s. Revenues 9,103,977  9,292,780 

  EBIT 489,963  468,191 

  Net result 321,396  325,834 

  Equity 17,805,918 18,131,752

  Total assets 28,332,362 24,973,731

Kaucuk a.s. Revenues 10,202,929  10,395,442

  EBIT 561,906  553,270

  Net result 277,711  455,081

  Equity 6,340,241 6,795,322

  Total assets 9,211,038 8,909,922

in 000 CZK   2004 IFRS* 2005 IFRS

Paramo a.s. Revenues 9,136,966 11,073,141

  EBIT 285,720 -156.744

  Net result 157,137 -267,072

  Equity 1,596,225 1,837,825

  Total assets 3,419,894 4,353,063

Spolana a.s. Revenues 5,070,504  5,757,796 

  EBIT 250,250  291,884

  Net result 118,527  183,071

  Equity 884.528 1,067,599

  Total assets 3,782,827 3,870,302

Unipetrol Rafinerie a.s. Revenues 59,252,192  81,384,840

  EBIT 1,365,415  958,694 

  Net result 1,061,731  563,657

  Equity 827.805 1,391,463

  Total assets 9,531,005 13,390,578

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Refining activity:

UNIPETROL RAFINÉRIEThe company UNIPETROL RAFINÉRIE which manage of 51% of CESKA RAFINERSKA production capacity made in 2005 a net profit of 563 m CZK. Achieved result was lower by 498 m CZK than in 2004. The main reason was a drop down in the average UNIPETROL RAFINÉRIE’s refinery margin, what was caused by specific product mix which depends on the needs of downstream companies from UNIPETROL Group (i.e. higher participation of feedstock for Ethylene Unit in CHEMOPETROL in UNIPETROL RAFINERIE production outcome). Because of this fact UNIPETROL RAFINÉRIE, a.s. could not be in direct way compared with other more “typical” refinery. Negative impacts on the achieved result had the unit break down of the Fluid Catalyst Cracker (FFC) in the Kralupy site in Q2 2005 and the time shift of price formula in the contract for raw materials between UNIPETROL RAFINÉRIE and CHEMOPETROL which is taken from 45-days delay in base for products’ price calculation. Moreover, accounting revaluation of IKL first fill had another negative impact about -300 m CZK during year 2005. Crude oil processing in 2005 was equal to 3,516.3 thou. tons it is mean higher by 15.6% than in 2004. Simultaneously, 16.3% increase of sold volume was achieved thanks to closer cooperation with PKN ORLEN S.A.

PARAMOIn 2005 the company generated a loss after tax of 267 m CZK (in 2004 it made profit 157 m CZK). Revenues from the sales of own products and services grew by 1 936 m CZK over 2004 and reached the level of 11 073 m CZK. This year results were caused by the fact that PARAMO a.s is a refinery, which does not posses a deep crude oil processing. PARAMO’s production is focused on dark products: lubricants and bitumens, in respect of which the company was not able to pass the increasing crude oil prices to the price of products. Crude oil processing in 2005 was equal to 635 thou. tons it is mean lower by 6.3% than in 2004, simultaneously the total volume of PARAMO’s sales drop down by 6.6%

Unipetrol Group – Financial and Operational Results for 2005

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Unipetrol Group – Financial and Operational Results for 2005

Retail activity:

BENZINADuring majority of the year 2005 a trend of increase of fuels’ purchase and sale prices was noted, which negatively affected the results of BENZINA. The company was not able to reach the planned margins. In 2005 BENZINA reported a loss in amount of -499 m CZK in comparison with -1 m CZK in 2004. Negative impact on profit in 2005 was caused especially by creation of impairment for unprofitable filling stations and reserves for financial investments – BENZINA Trade (- 333,8 m CZK total), fail of budgeted margin (-315 m CZK) . Total sales including sales of own services in 2005 reached the level of 11 426 m CZK. Volumes of fuel sold on filling stations in 2005 (446 162 thou. litres) were similar to last year figures. In 2004 volumes of fuel sold on filling stations were 446 010 thou. litres. In an area of restructuring and reorganizing the operational activity within the UNIPETROL Group in 2005 BENZINA sold its wholesale business to UNIPETROL RAFINERIE what had a positive influence of company’s financial result (+268 m CZK).In the second half of the year 2005 BENZINA introduced the cost cutting program and reorganized its non-fuel business. The company prepared the liquidation process of its subsidiary BENZINA Trade. At the end of the year 2005 the sole shareholder of BENZINA increased the equity of the company by 1 299 m CZK. The funds from the capital increase strengthened the financial position of the company and allowed BENZINA to reorganize its liabilities.

Chemical activity:

SPOLANAIn 2005 SPOLANA recorded profit after tax of 183 m CZK which is the best SPOLANA´s result in the past decade (for comparison – in 2004 the company registered net profit at the amount 118 CZK and in 2003 significant loss). An increased demand for the main SPOLANA´s products- especially: caprolactam and ammonium sulfate, has positively impacted on the economic result. The development of margin in markets and higher operating rates of production capacities contributed substantially to the SPOLANA´s results too. Improved company's economic results in 2005 were also due to managed to ensure cheaper company financing.

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Unipetrol Group – Financial and Operational Results for 2005

Petrochemical activity:

CHEMOPETROLAccording to the non-audited results CHEMOPETROL, a.s. reached a profit after tax of 2 642 m CZK, which is the best CHEMOPETROL´s result in the past decade. In 2004 the company registered profit after tax of 1 952 m CZK, which means an improvement of 35% year over year. This result was achieved even while the prices of raw material for petrochemical production significantly grow up. Positive impact on the achieved result had also a time shift of price formula in contract for refinery products between CHEMOPETROL a.s. and UNIPETROL RAFINÉRIE a.s. (A time shift of price formula in a period of raw materials increase influences very positively the company’s results). Simultaneously, prices increase of petrochemical products, made possible keep the margins of CHEMOPETROL’s products at the favourable level, similar like it was in the 2004. Production of all units was stable. Total revenues from sales of own products and services is equal to 31 237 m CZK CZK, which is an increase of 2 337 m CZK as against the same period of the last year (i.e. 8%). In the area of financing, the year 2005 brought another positive: the company managed to ensure cheaper company financing and thereby reduce financial costs. The positive influence on the company’s EBIT had also a sale of the emission allowences.

KAUCUK

In 2005 the company generated net profit of 455 m CZK, which was 64% better than in previous year. The revenues from sales of 10 395 m CZK were higher than 2004 by 2%. The increase in revenues was mainly thanks to the increase in prices of petrochemical commodities caused by substantial increase in crude oil prices due to growing demand on world markets. However, the significant improvement of economic results as against the previous year is not only due to the increase in prices and margins of produced commodities but also thanks to sell of same fixed assets, cost reduction and better financial results achieved by cheaper company financing.

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Preliminary consolidated financial highlights of Unipetrol a.s. 2004-2005

Unipetrol Group – Financial and Operational Results for 2005

*restated results

in '000 CZK 2004 IFRS* 4Q 2005 IFRS 2005 IFRS

UNIPETROL a.s.Equity 32,670,542 39,010,634 39,010,634

Total assets 71,894,387 76,511,611 76,511,611

Revenues 86,251,009 26,549,902 105,842,218

EBIT 5,878,311 1,420,635 5,271,369

Net result 3,695,424 1,143,278 3,455,840

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Unipetrol Group – Financial and Operational Results for 2005

Commentary to 2005 consolidated financial results of Unipetrol a.s.

During 2005 the company achieved revenues from sales of 105 842 m CZK. The number, which is higher by 22% than the one reached during 2004, is the consequence of not only high products prices resulting from crude oil price increase but also of higher quantity of refinery products sold. Crude oil processed in Unipetrol Group (100% Paramo Refinery and 51% Ceská Rafinérská) reached the number of 4 151 thou. tons and increased by 11,6% in comparison to 2004.

Consolidated net profit of UNIPETROL for the whole year 2005 reached the level of 3 455 m CZK and was lower by 6% than 2004 figure. Although there was a good market situation in Czech Republic in 2005, beneficial prices and margins for petrochemicals produced within the UNIPETROL Group, consolidated results are lower than in previous year. The main reason was a drop in financial results of BENZINA and PARAMO. Negative impact on consolidated results had also the break down of the Fluid Catalyst Cracker (FFC) in the Kralupy site.

Consolidated EBIT in 2005 reached the level of 5 271 m CZK in comparison to the last year figure of 5 878 m CZK. Net debt of UNIPETROL in consolidated financial statements for 2005 reached the level of 11 960 m CZK in comparison to 17 239 m CZK in the previous year. The company also decreased its financial costs to 948 m CZK in 2005 from 995 m CZK in previous year.

In 4th quarter 2005 the revenues of the company reached the level of 26 549 m CZK and consolidated net profit was generated at the level of 1 143 m CZK. Crude oil processed in UNIPETROL Group (100% Paramo Refinery and 51% Ceská Rafinérská) in 4th quarter 2005 reached the number of 1 122 thou tons and increased by 8,5% in comparison to 4th quarter 2004. Refining utilization ratio (81%) was kept at the high level from 3rd quarter.

However the company faced a very serious problem in 2005 related to its shareholdings in Aliachem a.s. and Agrobohemie a.s., the companies which are subject to the sale and purchase agreements between UNIPETROL a.s. and Deza a.s. Due to the fact that there is the court proceeding performed over the above issues - UNIPETROL a.s. claims the validity of the agreements - the Board of Directors of UNIPETROL a.s. observes a risk associated with the future unfavourable court verdict for Unipetrol a.s. As the risk however is not quantified so far, there was no provision created in the financial statements of UNIPETROL a.s. for this reason. The value of the assets of Aliachem a.s and Agrobohemie a.s. stated in UNIPETROL a.s. consolidated statements amounts to 3 700 m CZK.

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Unipetrol Group – Financial and Operational Results for 2005

Commentary to 2005 non-consolidated financial results of Unipetrol a.s.

In 2005 UNIPETROL generated non-consolidated net result of 844 m CZK in comparison to 186 m CZK in previous year. Main influence on the company’s result had a financial income which was a dividend received from a subsidiary CHEMOPETROL

In 2005 the company UNIPETROL noted an increase in the administrative and other operational expenses. The increase in these costs resulted from undertaking new activities focused on co-ordination of operations within UNIPETROL Group and preparation and implementation of a new strategy of the Group.

Net debt of UNIPETROL in non-consolidated financial statements for 2005 reached the level of 1 175 m CZK in comparison to 1 832 m CZK in the previous year.

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Operational highlights for years 2003-2005

*Refers to Unipetrol Group1) Gasoline, Diesel, LHO, Jet

2) Gasoline, Diesel, LPG3) 51% of Ceska Rafinerska, 100% of Paramo

4) Gasoline, Diesel, LHO, Jet 5) Gasoline, Diesel, LPG, LHO

Operating data* Q1'03 Q2'03 Q3'03 Q4'03 2003 Q1'04 Q2'04 Q3'04 Q4'04 2004 Q1'05 Q2'05 Q3'05 Q4'05 2005

Total sales (tt) , of which 110 177 720 1,135 2,142 1,024 1,195 1,204 1,269 4,692 1,118 1,326 1,400 1,320 5,164

- light product sales (tt) 1 45 69 429 728 1,269 654 770 784 830 3,039 746 848 919 854 3,367- other refinery products sales 52 83 156 128 420 100 132 190 130 552 123 192 197 166 678- pet-chem sales (tt) 14 25 114 231 383 221 243 189 253 905 209 236 235 249 928- other product sales (tt) 0 0 21 48 69 49 50 41 56 196 41 51 50 51 192Retail sales of motor fuels (tL)2

110 130 137 129 507 107 130 133 120 491 104 126 136 120 486

Processed crude (tt) 131 143 671 978 1,922 834 898 952 1,034 3,718 874 1,022 1,134 1,122 4,151

Utilisation3 69% 69% 67% 71% 70% 62% 65% 68% 75% 67% 64% 74% 81% 81% 75%

White product yield4 45% 65% 68% 71% 68% 72% 67% 74% 70% 71% 72% 69% 72% 71% 71%

Fuel yield5 34% 48% 59% 60% 57% 46% 56% 57% 55% 54% 56% 60% 61% 56% 58%

Unipetrol Group – Financial and Operational Results for 2005

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Unipetrol Group – Financial and Operational Results for 2005

Key steps for 2005 (i.e. internal restructuring, growth and cost cutting, divestments, etc.)

• Acquisition of Unipetrol by PKN ORLEN

• Introduction of modern corporate governance structures. Integration of Unipetrol companies under a single management with common objectives and shared P&L responsibility

• Unipetrol developed a strategy for its key assets to maximize the value of the company

• Investor road show – presentation of Partnership Program and asset divestment strategy

• HR: harmonization of organizational structure and policy, implementation of MBO targets oriented system

• Partnership Program launched by Unipetrol with support from PKN ORLEN

• Implementation of PKN ORLEN´s Best Practices, Expert support from PKN ORLEN

• Capturing ‘quick wins’(insurance, cash-pooling savings)

• Starting of optimization of the UNIPETROL Group overall consolidated gross margin using the PIMS software

• Capital strengthening of retail business – capital increase in Benzina

• Operational reorganization of retail business – non-fuel business managed directly by Benzina and preparation for liquidation of Benzina Trade

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Unipetrol Group – Financial and Operational Results for 2005

• Disposals of Kaucuk, and Spolana in a tender

• Operational optimization of the UNIPETROL Group overall consolidated gross margin using the PIMS software

• Centralized Cash Pooling

• Implementation of the initiatives from the Partnership Program with the use of synergy effects between UNIPETROL and PKN ORLEN.

• Restructuring of BENZINA network. Cultivation of the assets portfolio of petrol stations

• Joint crude purchases with PKN ORLEN (economies of scale)

• Building of the polypropylene warehouse, commencement of the revamp of the ethylene unit, intensification of polypropylene and polyethylene (HDPE)

• Analysis and implementation of synergies with ORLEN companies in area of bitumens and lubricants

• Coordination of the logistic activity between PKN ORLEN and Unipetrol

• Harmonization of common corporate policies with PKN ORLEN:

• HR

• Marketing, PR

• Finance

• Corporate governance

• Cost management

• Central procurement

Key steps for 2006 (i.e. internal restructuring, growth and cost cutting, divestments, etc.)

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Financial assumptions

• EBITDA : + 11 % referring to macro environment 1

• CAPEX CZK 4.9 bn2

Total increase in CAPEX of ca. CZK 1 448 m 2006 vs. 2005

1) Macroeconomic environment conditions as in 2004 : Brent crude $38.2/b, Brent/Ural differential $4.1/b, refinery margin $3.5/b, CZK/EUR 31.90. Assumptions vs. 2005

2) Refers to Unipetrol Group

1 215

311

1 595

179 119

2 196

302

1 869

300201

Refining Retail Petrochemicals Chemical Others

2005 2006

Unipetrol Group – Financial assumptions for 2006