Moody's Investors raises PKN ORLEN's credit rating
Moody's Investors rating agency today raised PKN ORLEN's credit rating from Ba1 to Baa3, with a stable outlook. The rating agency recognised the Company's perseverance in maintaining stable financial results and its rational approach to capital expenditure planning. Moody’s is the second rating agency, after Fitch Ratings, to have upgraded PKN ORLEN's rating to the investment grade this year. Thus, after more than four years, the Company has regained its investment grade rating from both of the world's leading rating agencies.
In the justification to its decision, Moody’s analysts stressed that the upgrade was due to the improvement in operating performance and financial indicators reported by the Company over the last several years, despite the difficult macroeconomic conditions persisting in the European refining sector. The rating agency also recognised the Company's stable liquidity situation, as well as the reduction of its financial leverage and its maintenance at a safe level.
Moody’s analysts viewed the Company's strategy, adopted in November 2012, as ambitious. The strategy provides for significant financial flexibility, a dividend yield of up to 5% during the next several years depending on the Company's financial standing and macroeconomic conditions, as well as a sustainable investment policy. Emphasis was placed on the creation of standby capex, which will be utilised depending on the implementation of key investment plans and the prevailing macroeconomic conditions, particularly in the power generation and upstream segments.
Since 2009, when Moody's lowered the Company's credit rating to Ba1, PKN ORLEN's net debt has been reduced to PLN 4.8bn (as at the end of Q3 2013), thereby reducing its financial leverage to 17.8%. In the same period, key revenue-boosting projects were completed, including Europe's most advanced PX/PTA unit, which was placed in service in June 2011. In 2013, for the first time in five years, the Company paid out dividend of PLN 642m, or PLN 1.5 per share.
