PPC upgrade by Standard & Poor’s

Standard & Poor’s today upgraded PPC’s rating to BB- from B + with a stable outlook.

In its report, the house also points out that the additional profitability from energy production finances the subsidy of consumers and that the possible imposition of taxation by the government on the “skyrocketing profits” of the energy sector will have a small impact on the company, as profit margins in retail are very low.

S&P proceeded with the upgrade of PPC following the upgrade of the Greek economy on April 22, with the reasoning – as it states – that if necessary, the State, which owns 34% of the shares, has a greater opportunity to support the company. According to the report of the rating agency:

PPC remains protected from the increase in energy prices that began in 2021, due to its vertical operation and the insurance policy (hedging) it applies.

However, there may be side effects of rising prices and inflation on the level of difficulty consumers pay their bills.

The upward trend in operating results (EBITDA) is expected to continue. It is projected to reach 1 billion euros in 2023, from 845 million in 2020 and 871 million in 2021.

-Investments are also expected to accelerate, to 2 billion euros per year from 435 million in 2021.

-Liquidity after the increase of share capital and the sale of 49% of HEDNO is at high levels.

S&P states that a further upgrade of the company (favorable scenario) can be decided if the implementation of the strategic transformation plan of the company continues and the improvement of the financial results.

The unfavorable scenario, on the other hand, includes the increase of overdue debts from consumers, the delay of the de-ligation program and the possibility of selling 34.1% of the State shares.

Source: ΑΠΕ-ΜΠΕ