Fitch rates Mazeikiu Nafta

Fitch Ratings said it assigned Mazeikiu Nafta AB senior unsecured B+ and short-term B ratings.

The outlook is stable.

The ratings reflect the company's improving utilization rates of the Mazeikiai refinery, stable market position in the Baltic States and increasing export sales to western Europe and the US, as well as steady profit contribution from the crude oil and product transportation segment, Fitch said.

On the other hand, they factor in the volatile profits and cash flows of the company's refining business, relatively high refining costs, crude oil supply risk and low financial flexibility due to increased levels of restricted cash, the agency added.

The ratings also take into account the current difficult financial position of Yukos Oil Co., the majority shareholder who was forced to suspend crude oil supply to Mazeikiu Nafta under a long-term contract in February, following the Russian government auction of its main production unit, Fitch said.

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