Moody’s raises outlook on PKN ORLEN’s credit rating to positive

​PKN ORLEN is consistently strengthening its financial position and credibility for investors. This has been affirmed by the rating agency Moody’s, which has upgraded the Group’s rating outlook from negative to positive and upheld its credit rating at Baa2. The agency’s decision comes in the wake of PKN ORLEN’s agreement with the European Commission on the acquisition of Grupa LOTOS and a letter of intent signed with the State Treasury concerning integration with PGNiG. PKN ORLEN’s acquisition processes are positively viewed also by Fitch Ratings.

‘We deliver on our strategic objectives as planned, consistently expanding the scale of the business. Concurrently, we manage to keep financial ratios at safe levels, and this is bringing expected results. Moody’s and Fitch Ratings’ assessments are based on an in-depth analysis of the Group’s data and plans, and they confirm we were right to make the business decisions to acquire Grupa LOTOS, PGNiG and, earlier, the ENERGA Group. The Group is fast growing in the right direction through acquisitions and ambitious capital projects. Analysts appreciate that and underscore our immense potential and determination to build a strong global multi-utility group,’ said Daniel Obajtek, President of the PKN ORLEN Management Board.

In a statement of reasons for its decision, Moody’s said PKN ORLEN’s acquisition processes, which help to consolidate Poland’s energy sector, will contribute to diversifying the Group’s business and improving stability of its cash flows. The agency also stressed that PKN ORLEN intends to finance the transactions primarily with its own shares created through capital increase, while keeping debt to adjusted EBITDA at a conservative level not exceeding 2.0x-2.5x. The agency is of the view that the proposed acquisitions will be a strong boon to the Group’s post-acquisition EBITDA and its resilience to macro factors.

Moody’s analysts also emphasised PKN ORLEN’s strategic role in Poland as the fuel market leader that is bound to play a key role in the country’s energy transition given its commitment to investing in zero- and low-emission energy sources, including offshore wind farms. In its assessment, Moody’s noted the high degree of integration between the Group’s refining, petrochemical and retail businesses. It also pointed to the Group’s significant contribution to GDP and its position as a leading employer in Poland.

The benefits of PKN ORLEN acquiring Grupa LOTOS and PGNiG have also been recognised by Fitch Ratings, which has affirmed the Group’s rating of BBB- with a stable financial outlook. Analysts stressed that the acquisition of the PGNiG Group’s production, distribution and energy assets, combined with the recent acquisition of the ENERGA Group’s generation and distribution assets, will be profitable to PKN ORLEN. considering the expected shift in Poland’s energy mix towards increased use of renewable electricity and natural gas.