Fitch Ratings upgraded rating for PKN ORLEN

Polski Koncern Naftowy ORLEN S.A. ("PKN ORLEN", “Company”), informs that, on 30 August 2013 Fitch Ratings (“Agency”) has upgraded PKN ORLEN’s foreign long-term rating from „BB+/positive outlook” to „BBB-/stable outlook”. 

Agency justifies the change of rating for PKN ORLEN S.A. by the better Company’s financial profile thanks to measures taken to reduce leverage, including the disposal of Polkomtel stake, modest capex in 2011-2013 in comparison to a capex-intensive period in 2007-2010. These operations support PKN ORLEN creditworthiness in the still difficult conditions for the refining sector in Europe.

Agency, in its statement, indicates that the Company’s strategy announced on November 2012 supports PKN ORLEN S.A. credit profile. One of the strategic targets, positively evaluated by the Agency, is maintaining credit ratios at the safe level. Additionally, Agency has a positive view on additional capex specified in the strategy, which may be deferred if cash flows are weaker than expected.

Agency believes that the Company has much greater financial flexibility to reduce its capex if cash flows are weaker than in 2007-2010, when PKN ORLEN S.A. had significant investment liabilities. The Agency positively views PKN ORLEN S.A. ability to manage its working capital changes in line with changes in its financial position. This could provide additional flexibility for the Company if it closes to maximum covenant level defined in the main bank loan agreements, for instance due to weakening of the industry conditions.

Moreover, the Agency has upgraded PKN ORLEN’s national long-term rating from „BBB+(pol)/positive outlook” to „A-(pol)/stable outlook”. 

See also regulatory announcement no 160/2012 dated 30 August 2012.