22 July 2013 11:18 [Source: ICIS news]
LONDON (ICIS)--Poland's chemical and fertilizer producers, including second-largest European fertilizer producer Grupa Azoty, may face a significant gas tariff increase, an investment bank said on Monday.
Dominant Polish gas distributor PGNiG has applied to the gas market regulator for a tariff increase, applicable from 1 October, Prague-based WOOD & Company said.
Looking at what the impact of a 5% rise would be on Grupa Azoty, Piotr Drozd, a chemical industry analyst at the bank, said: “Natural gas accounts for 37% of Grupa Azoty's energy and material costs and is the group's largest cost item.
“Our sensitivity analysis suggests that a 5% increase in gas tariffs would affect the estimated 2014 EBITDA [earnings before interest, tax, depreciation and amortisation] by around 11%,” Drozd added.
Oil prices, to which the prices of Poland's imports of Russian gas are linked, do not yet justify a tariff increase and German hub gas prices were also largely unchanged, the bank added.
Grupa Azoty, having gone through a consolidation which makes it the consumer of approximately one-quarter of Poland’s annual gas usage Poland uses annually, has pledged to use its new scale to secure reductions in the pricing of its gas contracts with PGNiG.
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