Energy, EU – Baltic States, Investments, Lithuania, Oil, Transport

International Internet Magazine. Baltic States news & analytics Friday, 29.03.2024, 08:16

Fitch Ratings assigns international rating to PKN ORLEN

BC, Vilnius, 09.04.2014.Print version
The Poland-based oil company Polski Koncern Naftowy ORLEN (PKN ORLEN), informed that on April 8, 2014, international ratings agency Fitch Ratings assigned PKN ORLEN a national rating of 'A- (pol)' for planned by the company issue of the Series F bonds, within the public bond issue program, PKN ORLEN said in a statement, cites LETA.

The rating assigned PKN ORLEN takes into account the company's business diversification with operations in the refining, petrochemical and retail sectors, the company's strong position in the Polish market and an improved PKN ORLEN financial profile.

 

Fitch Ratings justifies the rating by the better company's financial profile thanks to measures taken to reduce leverage, including the disposal of Polkomtel stake, slowdown in capex in 2011-2013 in comparison to a capex-intensive period in 2007-2010. In the agency's opinion PKN ORLEN has much greater flexibility to reduce its capex in 2014-2017 than in 2007-2010, when it made some investments. These operations support PKN ORLEN creditworthiness in the still difficult conditions for the refining sector in Europe.

 

The agency expects to maintain difficult market conditions for refining sector also in 2014 and that refining margins remain at the level similar to the level in 2013. In the agency's opinion, retail and petrochemical segments will be main contributors to PKN ORLEN EBITDA in 2014.

 

Fitch Ratings indicates that in line with the announced by the Company strategy, PKN ORLEN paid dividend in 2013. The company plans a gradual increase in the dividend pay-out up to five percent of dividend yield, based on the annual average market capitalization of the company for the previous year, taking into account the achievement of strategic targets of safe financial standing and forecasts regarding macro environment. The agency, in its statement, positively views the chance of reduction of obligatory inventories maintained by PKN ORLEN, based on the draft bill presented by the government in this regard. However, Fitch Rating indicates also that it is too early to determine the exact impact of the regulation changes on the company's leverage ratios.






Search site