PKN Orlen's leverage indicator (net debt to EBITDA) will decrease to 0.7 in 2012 from 1.6 in 2006 according to projections PKN Orlen announced Thursday in accordance with the planned issue of Eurobonds.
Our view: In our model we calculate with a leverage of 1.32 for this year, versus PKN's own forecast of near 1.6. Similar to the company we assume the sale of its Polkomtel stake this year, but see some delay in CAPEX to 2008. Therefore, our 2008 leverage forecast of 1.54 already exceeds company's forecast of 1.4. From the peak leverage level in 2008 we see a continuous decline in gearing what falls in line with PKN's own forecast: we see net debt to EBITDA at 1.07 in 2011, pretty in line with the company's own estimate of 1.1.