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2021/07/02 / Erste Group Research

Oil price and polyolefin margins accelerate deleveraging process at OMV

The acquisition of the additional 39% stake in the chemical group Borealis for USD 4.7bn increased the net debt of OMV significantly to EUR 9bn as of 31 December 2020 (31 December 2019: EUR 4.7bn).

Thanks to higher oil prices and record-high polyolefin margins, OMV managed to reduce net debt in Q1 2021 by EUR 300mn. Operating cash flow before working capital (EUR 1.7bn; +104% y/y) increased substantially, also due to the full consolidation of Borealis. The new segment, Chemicals & Materials, contributes a third of the total number.

The credit metrics will continue to improve in 2021, driven by the good operating performance and the EUR 2bn divestment programme. Including the contract signed in June for the sale of the OMV business in Slovenia to MOL for EUR 301mn, sales of EUR 1.5bn worth of investments have been contractually agreed on or consummated.

The spreads of the group’s bonds reflect this fact. We regard the hybrid bonds of OMV as relatively attractive.

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General information

AuthorErste Group Research
Date2021/07/02
Languageen
Product nameCredit News
Topic in focusCredits/ Corporate bonds
Economy in focusAustria
Currency in focusEuro
Sector in focus-
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