Czech Unipetrol downgraded on lack of growth potential

Raiffeisen Centrobank has downgraded its rating on the stock of Czech petrochemical producer Unipetrol to 'Reduce' from 'Hold' noting its lack of growth potential, according to ICIS news.

"We like Unipetrol's restructuring and debt reduction track record and we think that with its specialisation in niche petchem products, the company will be able to tackle future challenges, especially the upcoming Middle Eastern petchem competition, the bank said.

"However, with the strategy of [Polish parent company] PKN Orlen, we see little growth potential other than the organic growth fuelled by the incremental central & eastern (CEE) European petchem demand," Raiffeisen added in an analyst report.

Since being swallowed up by Poland's PKN Orlen, Unipetrol seems to face real difficulties in pursuing an active modernising management style. Previous CEO, Francois Vleugels, moved on soon after the takeover and complained then about interference from Orlen.