PKN Orlen announced its Germany retail subsidiary has expanded its network by purchasing 58 fuel stations located in Northern Germany from BP for a total of EUR 7.6m.
Our view: We see the news as neutral. The per station purchase price seems low to us when compared to other regional deals, thus we see PKN has definitely assumed certain liabilities with this deal. We see a larger retail network could provide Orlen Deutschland a higher pricing power, but we do not expect major profitability improvement on the back of the transaction. Even if PKN’s German retail unit has improved its profitability recently, on a group level it remains low when compared to other businesses.