BAKU

Petkim, the Turkey-based Petrochemical complex owned by SOCAR, Azerbaijan’s state energy company, reported a net profit of 892 million Turkish liras ($108 million) in the first quarter of 2021 compared to a net loss of 10 million liras in the same period last year, the company said in a report.

The operating profit of the complex amounted to 1.225 billion liras as of April 1, 2021. The real production capacity of all 16 Petkim enterprises totaled 92 percent, which the holding estimates as “an excellent indicator” against the backdrop of the ongoing COVID-19 pandemic.

At the end of 2020, the concern’s net profit amounted to 1.1 billion liras, 14 percent up from the 2019 level. Operating margin (EBITDA) reached 1.9 billion liras in 2020.

Petkim is 51 percent-owned by SOCAR Turkey Enerji A.S. (STEAS), which in turn is 87 percent-owned by SOCAR and 13 percent by Goldman Sachs International. SOCAR acquired a controlling stake of Petkim in 2008.

Fitch Ratings has affirmed Petkim’s long-term Issuer Default Rating (IDR) at ‘B’ with a “stable” outlook in October 2020.

The agency said that the “stable” outlook reflected Fitch’s expectations of positive free cash flow (FCF) generation and moderate deleveraging over 2020-2023.

“We forecast funds from operations (FFO) net leverage to reduce to 3.5x by 2023, supported by a petrochemicals sector recovery, and after payment of the last $240 million installment in 2021 for the stake acquisition in SOCAR Turkey Aegean Refinery (STAR),” Fitch said.

Petkim is in the process of acquiring of 18-percent stake in STAR refinery. It had delayed the last of three equal $240 million instalments for the stake until June 2021.

Fitch said that the last payment would be made if there was no severe downturn in Petkim’s performance in 2021.

The first two instalments were paid in 2018, funded by a $500 million bond placement.

The $6.3 billion STAR refinery is also owned by SOCAR. Its annual capacity is 10 million tonnes of oil.