Fitch rates Petrol Ofisi

Fitch Ratings said it assigned Turkey-based Petrol Ofisi AS' senior unsecured local currency and foreign currency B+ ratings.

The outlook is stable.

Fitch said key factors supporting the ratings are Petrol Ofisi's leading domestic market position, sizeable network and storage capacity with economies of scale and competitive advantage for direct fuel imports. The ratings also consider Petrol Ofisi's good and improving financial and operational performance post-privatization in 2000, capacity to generate future free cash flow, flexible capex, and currently fixed distribution margins ($0.09/litre of diesel and $0.11/litre of gasoline).

Against that, Fitch noted, Petrol Ofisi has become highly leveraged as a result of privatization in 2000, although the company is successfully reducing debt and is expected to continue to do so. It also remains inefficient on average throughput per station basis, when compared to domestically present international brands or leaders on foreign retail markets.

Given its domestic focus, Petrol Ofisi remains fully exposed to the relatively unstable Turkish economy.

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