Moody's raises its outlook for Poland's PKN Orlen to positive

09 October 2012 14:54  [Source: ICIS news]

LONDON (ICIS)--Moody's has raised its outlook rating for Polish oil and petrochemicals group PKN Orlen to positive from stable, the ratings agency said on Tuesday.

“The rating action reflects the sustained recovery in operating performance and financial metrics reported by PKN Orlen in the past 18 months despite the challenging operating conditions persisting within the European downstream sector,” Moody's said.

“Since the downturn of 2009, Orlen's operating profitability has recovered to healthier, albeit lower than pre-crisis levels. This has benefited from robust petrochemical volumes (boosted by the commissioning of a new paraxylene [PX] and PTA [purified terephthalic acid] plant in Plock) and margins, as well as resilient contributions from retail activities underpinned by volume growth, which partially offset downward margin pressure,” it added.

Looking ahead, Moody's cautioned that the more benign operating conditions, in terms of refining and petrochemical margins and Ural-Brent oil differentials, that have benefited Orlen in the past six months, may not extend into 2013.

“With new capacity expected to come on stream, margins could come again under pressure at a time when global economic growth conditions are uncertain,” Moody's said.

Orlen's refining and petrochemical plants have been suffering from a high level of maintenance shutdowns, the ratings agency added.


By: Will Conroy
+44 20 8652 3214



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