IBI-Rating has updated the credit ratings of «Ukrzaliznytsia» PJSC

IBI-Rating informs on the affirmation of the long-term credit rating of «Ukrzaliznytsia» PJSC at uaBB grade with change the outlook from «in development» to «positive».

The revision of the credit rating of the bonds is due to the repayment of a significant amounts of interest-bearing bonds, as well as positive dynamics financial results of the Issuer's. Сonformity to the consolidated financial statements prepared according to IFRS, net income of «Ukrzaliznytsia» PJSC by 9 months of 2017 compared to the same period of the previous year, increased by 11.1% to UAH 53,519.9 million. The result of the activity was net profit of amount UAH 80.4 million, whereas during the previous several years the activity was unprofitable.

The financing of the activities of «Ukrzaliznytsia» PJSC is carried out including at the expense of borrowed funds, the vast majority of which are nominated in foreign currency. The sensitivity to currency risk is partially reduced by the presence of currency revenues from transit traffic. Several bank loans are undergoing restructuring, which is currently a key factor limiting the level of the Issuer's long-term credit rating.

«Ukrzaliznytsia» PJSC is formed on the basis of the State Administration of Railway Transport, enterprises and institutions of public transport of railways, which are reorganized by merger. «Ukrzaliznytsia» PJSC is a natural monopolist on rail transport in the territory of Ukraine, which provides a stable cash flow from operating activities. At the same time, the Company depends on state regulation, first of all, setting tariffs for transportation. There is a need for significant investments in the renovation of rolling stock of «Ukrzaliznytsia» PJSC, due to high wear and tear.

Materials used for conducting the analytical research were obtained from «Ukrzaliznytsia» PJSC, including: financial statements for 2015-2016 and 9 months of 2017, reference information on the activities of «Ukrzaliznytsia» PJSC, information on issues of interest-bearing bonds, other necessary internal information, as well as information from open sources, which the Rating Agency considers to be reliable.

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