03 April 2012 16:51 [Source: ICIS news]
LONDON (ICIS)--Raiffeisen Centrobank has initiated coverage of Austrian chemical group OMV with a ‘buy’ recommendation, citing strengths including its indirect ownership stake in expanding petrochemical joint venture Borouge, the bank said on Tuesday.
“We believe that investors should pay more attention to the value of the petrochemical assets of Borouge, in which OMV has an indirect (through Borealis) holding of 14.4%,” said Oleg Galbur, a Raiffeisen analyst.
“After the three-fold increase of its production capacity last year, Borouge will more than double its existing capacities by 2014, thus increasing its contribution to OMV’s fair value,” he added.
Last year OMV was able to more than double its income year on year from associated companies in 2011, to €224m ($299m), Galbur noted.
The improvement was driven by the ramp up of capacity at Borouge – a plastics producer owned by Abu Dhabi National Oil Company (Adnoc) and Austria-based petrochemical producer Borealis – as well as more favourable petrochemical margins, he added.
OMV, through its 36% participation in Borealis, should see even better income from Borouge in 2014–2015, once the 2014 expansion known as Borouge 3 – due to add an extra polyolefin production capacity of 2.2m tonnes/year – is completed, Galbur said.
($1 = €0.75)
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