Following post is my own opinion and it is not an investment recommendation within the meaning of Polish Finance Minister regulation (Dz. U. Z 2005 roku, Nr 206, poz. 1715)


This year was very difficult for polish stock exchange, we had Putin, partially nationalization of open retirement funds, low volume, deflation, fear on polish stock market etc….

I have made it up with it and I have reduced my position to minimum with an in mind of better times in future 😉

However, as in real life best occasions went in the most unexpected moment.

This occasion is fall of crude oil prices. Analytics mostly talk about its prices, refineries or influence on gasoline price, but I have not heard about oil price influence on income results in companies which are strongly related with oil derivatives like transport, some fields of chemistry or polymer factories.

What the most important there is a STRONG correlation in this sectors on costs, net income margins and profits, what would cause speculative reaction on that stocks after quarterly report publishing. (Link)

Sectors in which crude oil have a large influence on costs or supplies level, I skip other commodities which are correlated with oil natural gas, coal or whole sectors like renewable energy due to simplify my analysis:

Oil Drilling – Such companies will have to reduce most of their investments in new drillings. Currently exploited oilfield will have been less profitable during the oil will be cheap. Above-mentioned conditions would cause bear market in theirs stocks.

Refineries– Falling down of oil price will cause update of supplied oil value, what will have made a large write-offs. Important question is how they will perform it one time or split it into few write-offs with quarterly rapports. (Link)

Both sectors are good fundamental opportunity to undertake short positions.

Fuel Distributors – They would have also a write offs, what might cause short term price falling. But after that they will probably work on assumptions margins, what paradoxically in midterm might strength the price.


Polymer Industry – Oil is major component to produce standard Polymers, this process is called polymerization and carbohydrates are necessary to produce polymers (Link), falling down of price will have to reduce the cost of materials, what will make a margin higher as long as Oil will be cheap.

The same situation should happened in Carbohydrate part of chemical industry.

Transport – Similar situation to above, fuel cost has large wage in overall costs in such companies.

Power plants but only fueled by oil – Simply lower cost of materials used in energy generation = lower costs and better margins

Energy Efficiency – in oil bear market companies that extract the oil have to be more efficient and cost effective. In this situation they mostly invest in this fields what make extra contracts for companies which perform it.


Short Positions : Refineries and drilling

Lotos – The second biggest Polish refinery, but also oil drilling company which invest in oil field on north and Baltic Sea. Company is after stock emission and midterm price falling. Main owner is Polish state. Since summer company is in falling trend.

P/BV = 0,48;  C/CP = 0,12; EV/EBITDA = 25,62; net income negative, overall debt 55%

Serinus (former KOV) – The polish drilling company which invested in Ukraine, Syria, Romania, Tunisia and Brunei unfortunately most of them are currently unavailable due to war reasons. Despite its company takes profits in income statement. Main owner is Polish Billionaire – Jan Kulczyk.

Currently is very cheap in indicators, what would complicate future falls
In my opinion whether geopolitical problems will finish this company might be a Polish black horse, seeing that they survive a real crisis which can eradicated them, so in good conditions they experiences and management quality should be a decisive comparative factor.

P/BV  0,64 , P/REVENUES  0,63; EV/EBITDA 11,15; net income negative,  overall debt 47%



Long/short – depend of investment horizons

PGNIG – Great unknown in current scenario, because only 10% of revenues come from oil. PGNIG is biggest gas supplier in Poland and have many concessions on gas extract in Poland. Russia accounts payments for natural gas in refer to oil price that might make a better net margins.  Main owner is Polish state.

P/BV  0,87; P/E  8,17; P/Revenues 0,81;   EV/EBITDA   5,08; Overall debt 39%, div 6%



PKN Orlen – Polish biggest refinery and oil distributor, major owner is Polish state (27,5%). They do not extract oil. In my opinion they will have large write-offs what will cut down of share price but after it might rise because they should have a better net margin.

P/BV  0,92; P/REVENUES 0,19; net income negative; Overall debt 51%



Long Positions:

Polymer Industry

Erg – This Company process polyethylene it has also a dependent company Bioerg which is focusing on biodegrade packs. Free float 61%, but liquidity of trade is very low.

P/BV  0,47; P/E  24,94;  EV/EBITDA  5,82;  EV/EBIT  39,87; Overall debt 46%

Ergis – Central European leader in PVC processing.

P/BV  0,68 ;P/E  5,28;  EV/EBITDA 6,31; Overall debt 56%; dividend yeld 2,6%

Lentex Capital group (Includes Gramrat, Novita) Polish biggest group in this industry. Major owners – Krzysztof Moska and Leszek Sobik. Mr Moska is going to consolidate mayor producers in this sector in Lentex group. What we might saw during call on Novita’s stocks.
It is only company, in this sector which mentioned in financial statement that oil price is important risk. This year company three times rose income forecasts.

P/BV  1,25; P/E 9,02; P/REVENUES 1,00; EV/EBITDA  6,94; Overall debt 32%; dividend yeld 4,1%


PlastBox – Manufacturer of PVC packs, buckets etc.  Company has two factories one in Poland, second in Ukraine.  Main Owner is Moska but he do not have majority.

P/BV  1,25; P/E  7,62;  EV/EBITDA 6,06; Overall debt 52%; dividend yeld 3,2%

Suwary – manufacturer of bottles, Packs, corks, plastic triangles, extinguishers etc. Major owner and CEO is Walter Kluskowsky.  Low liquidity.

P/BV  1,03; P/E 8,97; EV/EBITDA 6,46; Overall debt 49%

Radpol – thermal and electrical insulations, PVC pipeline manufacturer. Within one year stock price has fallen by 40%. Shareholder structure is distributed major part are banks and investment funds.

P/BV  1,97 ; P/E  9,66  EV/EBITDA 8,90; Overall debt 56%; dividend yeld 3,6%


Chemistry (Link)

Synthos – The biggest European synthetic rubber producer, owned by Polish billionaire Michal Solowow. Within next few years company is going to invest in new rubber lines. The main question is which type of butadiene this company uses? Made from oil or ethanol?

P/BV  2,49; P/E  10,74; P/REVENUES 1,06;   EV/EBITDA   7,22; overall debt 52% , dividend yeld 7,8%



Polwax – Polish grease and candle producer. It’s a quite new company in our stock market, few years before it was made from secession of Lotos grease department via LMBA. Crude oil derivatives like petroleum jelly or glycerin are used as base in their products so influence on costs should be large 😉

Main risk factor is dependence from lotos, about 50% of gycerine supply is taken from lotos.

P/BV  2,75; P/E  6.60; overall debt 56%; dividend yeld 6.2% (pre IPO)

PCCrokita – Polish chemistry conglomerate, inside group is also company focused on chemicals transport. Company is widely known in Polish market due to bond emissions, which company bought-back.

P/BV  1,31; P/E 12.50; overall debt 50%; dividend yeld 9,3 % (pre ipo)


Azoty Group (includes Pulawy and Police) –Polish chemical conglomerate,  one of most important product are phosphates. It uses a large amount of natural gas, what in current market situation might improve margins. For example in 2013 company bought gas for 2,2 mld zł . What in current market situation should improve a net margin.

P/BV  0,96; P/E 29,74; P/Revenues 0,64;  EV/EBITDA   8,81;  EV/EBIT 31,44

overall debt 43%; dividend yeld 0,3%

Mercator Medical – Company focused on rubber gloves producing. Main factory is located in Thailand. Its market is distribiuted in 40 countries.

P/BV  1,65; P/E  8,92;  P/REVENUES 0,67;  EV/EBITDA  7,02; dividend yeld 0,3 % (pre ipo)



Transpolonia – Company focused on chemicals and bitumen transport. Major Owner in Dariusz Cegielski.

P/BV  1,11; P/E  5,94; P/REVENUES 0,39; EV/EBITDA  5,70; overall debt 61%



PCCintermodal – company from PCC group focused on chemical transport.

P/BV 1,50; P/E 20,55; P/REVENUES 0,68; EV/EBITDA 15,46; overall debt 47%

Optional – Logistics companies with large transport department:

Pekaes – Large polish speditor. Major owner in Jan Kulczyk

P/BV  1,11; P/E  18,12; P/REVENUES  0,47; EV/EBITDA 8,74; overall debt 36%


PKPCARGO – Biggest Polish train Freight Company, some of their locomotives are fueled by oil. Biggest but indirect owner is Polish state.

P/BV  1,03; P/E  9,89; P/REVENUES 0,83; EV/EBITDA  5,34; dividend yeld 3,7% (pre ipo)



Ot Logistics – Large company specialized in river transport, it also have docks in biggest Polish ports. Main owner is Mistral Private Equity Fund. Volume is low.

P/BV 1,5; P/E 11; overall debt 61%



Maybe black horse from NEWCONNECT?

Techmadex –Company which diagnosis gas lines and gas compressors. Might be a good choice because in current situation biggest companies in gas/oil sector will be more willing to invest in efficiency and costs reduction in which this company is specializing. Major owners are partners who works in  company and one strategic investor. Freefloat is 7% so liquidity is very low.

P/BV  2,20; P/E  12,50; P/REVENUES 0,41; EV/EBITDA  6,98; overall debt 71%; dividend yeld 3,2 % (pre ipo)


Unimot Gaz – LPG and Gas oil distributor. Has large momentum of revenues and net income. Forecasts are predicting increase on about 50% within a year.

P/BV  4,76; P/E  17,30  ; EV/EBITDA 15,55, div 0,4%, overall debt 80%


Plastpack –  packs producer, freefloat ~10%

Company suffer from lack of liquidity and extreme variability.

P/BV  2,66; P/E  16,50; P/REVENUES 3,67; EV/EBITDA 10,13; div yeld 1,9%; overall debt 16%



Of course in other countries scenario should be similar. I have written about companies listed in Polish stock market because I have been living here 😉

If You have any question, Ask in comments 😉

Ps. Sory for mistakes, I have written this post very quickly 😉

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