ORLEN exceeds Fitch Ratings expectations
Today Fitch has communicated its decision – favorable from the perspective of PKN ORLEN credit risk assessment – on removing the company from Rating Watch Negative, i.e. the list of entities under surveillance related to the possible short-term rating reduction.
In the Agency’s opinion, the significant debt reduction at end-2009, attained by the Company in spite of unfavorable external conditions, lowers the risk of the Company’s credit rating exacerbation. The activities undertaken by ORLEN last year – within the scope of improving working capital and reducing investment expenditure – made it possible to cut down its indebtedness by 25% and arrive at debt indicators exceeding the Agency’s expectations. Fitch also takes heed of the fact that the Company has fulfilled the credit contract requirements.
Over the last year, PKN ORLEN earned PLN 5 billion on its operating activities, i.e. PLN 1.5 billion more than in 2008. Therefore, it was able to execute its assumptions according to which operating revenue should be higher than capital spending. We have decreased our net debts by PLN 2.3 billion, to the level of PLN 10.3 billion. For PKN ORLEN, 2009 turned out to be the hardest year with respect to the macroeconomic conditions. A large decrease of the differential and refining margins seemed to be one of the biggest challenges in that period. An immediate activation of a program package – undertaken at the beginning of the year in order to improve effectiveness - allowed for the negative impact of the crunch to be largely reduced.
- All of us are very happy to know that our efforts and actions performed in such difficult economic surroundings have been noticed, resulting in better PKN ORLEN credit ratings from Fitch. The Company’s achievements in the field of debt reduction make up the first, important step towards regaining the investment rating - said Jacek Krawiec, President of the PKN ORLEN Management Board.
It is worth underlining that as the difficult macroeconomic conditions are likely to prevail within the industry in 2010, the ratings of most refining companies, evaluated by the Agency, are negative (Negative Outlook), PKN ORLEN being no exception. PKN Orlen’s plans for 2010 stipulate consistent pursue of further debt reductions, effected by means of using comprehensive solutions with regards to the obligation of maintaining obligatory stocks of fuels and non-core asset divestment. The foreign investment profitability improvement programs, i.e. ORLEN Lietuva and Unipetrol, will be continued.
