Petkim Petrokimya Holding AS (PETKM), a Turkish petrochemicals maker, surged to the highest level in almost 13 years as investors speculated it will reduce costs while benefitting from government incentives.
The shares advanced 7.5 percent to 3.15 liras at the close in Istanbul today, the highest close since March 2000. Petkim has gained 51 percent since Oct. 15, when parent State Oil Co. of Azerbaijan, known as Socar, said it will invest as much as $8 billion by 2016 on projects including a refinery, a new port and power plants.
“Four key developments have led to the surge,” HSBC analyst Bulent Yurdagul said in a phone interview today. “The prospects of importing naphtha from Iraq and buying gas directly from parent Socar, the refinery investment and the securing of government incentives for such investments.”
Petkim said Dec. 21 that it will start imports of naphtha, its most important raw material item in terms of costs, from neighboring Iraq. On Dec. 25, the company said it received approval to buy as much as 455 million cubic meters of natural gas a year directly from Socar, an amount which could cut annual costs by $10 million to $15 million, Yurdagul said.
Turkish government incentives also saved Socar $1.5 billion on its Star Refinery project, Vatan newspaper reported on Dec. 29.
The company will benefit from “integration with the Star project,” BGC Istanbul Securities analyst Ezgi Yilmaz said in an e-mailed report today. BGC raised the company’s target price to 4.34 liras a share from 2.46 liras.
Petkim reported net income of 15.3 million liras on 1.1 billion liras in revenue in the third quarter of 2012, according to data compiled by Bloomberg. The company had reported losses in the previous three quarters, according to the data.
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