Fitch downgrades Turkey’s Petkim for ‘severe underperformance’

27 March 2012 14:57  [Source: ICIS news]

LONDON (ICIS)--Fitch Ratings has downgraded major Turkish petrochemical producer Petkim because of its severe underperformance” in the fourth quarter of 2011, the rating agency said on Tuesday.

Petkim’s long-term foreign and local currency Issuer Default Ratings (IDRs) were dropped to 'B+' from 'BB-', while its national long-term rating was moved down to 'A-(tur)' from 'A+(tur)', it added.

“In Fitch's view, Petkim's severe underperformance in the fourth quarter 2011 highlights the company's vulnerability in the face of cyclical downturns and signals a further weakening in its competitive position, at a time of reduced demand visibility and increasing price volatility,” Fitch said in a statement on the downgrade.

On 6 March, Erste Group bank said Petkim had suffered a “disastrous” fourth quarter, with margin deterioration hitting the producer even harder than anticipated.

Pressure on the company’s profitability came from high prices of oil and naphtha, the company’s main input cost factor, it added.

Despite the downgrade, Fitch said that Petkim's outlook is 'stable' on all its ratings.

The controlling shareholder in Petkim is the State Oil Company of Azerbaijan (SOCAR).

By: Will Conroy
+44 20 8652 3214

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