Fitch raises PKN Orlen outlook to stable

03 September 2010 14:06  [Source: ICIS news]

LONDON (ICIS)--Fitch Ratings has changed its outlook for Polish oil refining and marketing company PKN Orlen to stable from negative, reflecting moderate improvement in market conditions for the European refining and petrochemical sector, the ratings company said on Friday.

The analysts said the change in the outlook also took into account the company’s improved cash-flow generation and credit ratios in the first half of this year.

“Fitch takes a positive view of the company's efforts to increase financial flexibility by optimising working capital and monetising part of its compulsory stock of crude oil,” said the analysts.

They added that they anticipated that PKN Orlen would “continue to reduce debt, which is one of management's strategic targets, and supports the stable outlook”.

“Negative rating action could result from a failure to further improve leverage ratios (excluding inventory holding gains/losses), for example, due to a slower recovery in refining profits than currently envisaged by Fitch,” said the ratings agency.

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By: Hilde Ovrebekk
+44 20 8652 3214



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