06 November 2012 17:24 [Source: ICIS news]
The deal, which should mean the cancellation of the price issue suit filed in February by PGNiG at the
“The new formula and potential gas price cuts are a clear positive for the Polish fertilizer producers, including Zaklady Azoty Tarnow (ZAT), Zaklady Azotowe Pulawy (ZAP) and [ZAT subsidiary] Zaklady Chemiczne Police (ZChP),” WOOD & Company investment bank analyst Piotr Drozd said.
“Although the exact impact on Polish tariffs is difficult to estimate... we expect that the new contract could trim gas prices by 5-10%,” he added.
Gas feedstock accounts for 40% of ZAP’s Cost of Goods Sold (COGS), while the figures for ZAT and ZChP were 23% and 17%, respectively, Drozd said.
“Based on our sensitivity analysis, a 10% reduction in gas costs would up ZAP's [forecast] 2013 EBITDA [earnings before interest, tax, depreciation and amortisation] by 33%,” he said.
The figure for ZAT was 17%, while for ZChP it was 20%, Drozd added.
The Polish government has long insisted that the price
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