IBI-Rating has updated the credit ratings of PrJSC «KIROVOGRADOBLENERGO» and its bonds

Rating agency IBI-Rating informs on affirming of the long-term credit ratings of PrJSC «KIROVOGRADOBLENERGO» and its interest-bearing secured bonds of A series (nominal volume of the issue amount UAH 5 mln., with redemption in August 2025) and C series (nominal volume of the issue amount UAH 120 mln., with redemption in March 2022) at uaBBB grade. The credit rating outlook was changed from «stable» to «evolving».

In 2018, PrJSC «KIROVOGRADOBLENERGO» carried out activities on the transmission and supply of electricity by local power grids to consumers in the Kirovograd oblast. In accordance with the Law of Ukraine «About the Electricity Market» from 01/01/2019, the PrJSC «KIROVOGRADOBLENERGO» has only the distribution function of electrical energy. The Company has the necessary licenses to carry out the above-mentioned activities. The PrJSC «KIROVOGRADOBLENERGO» is a natural monopoly on the territory of Kirovograd oblast, which ensures stability of sales.

Following the results of 2018, PrJSC «KIROVOGRADOBLENERGO» reduced the useful supply of electricity to its consumers by 1.6%. According to the results of the year, consumer debt for electricity increased. The largest debtors remained population and enterprises of housing and communal services.

Net income of PrJSC «KIROVOGRADOBLENERGO» for 2018 increased by 11.8% amounting to UAH 2,546.9 mln. It is noted the growth in most components of the net income, the main of which is the supply of electricity to legal entities. It should be noted a significant amount of other expenses (mainly from the revaluation of fixed assets, as well as from the revaluation of securities and the write-off of fixed assets), which amounted to UAH 264.7 million. The result of activities for 2018 was a net loss of UAH 290.4 million.

In 2018, the volume of interest-bearing debt obligations of PrJSC «KIROVOGRADOBLENERGO» increased by 1.3% and as of December 31, 2018, amounted to UAH 537.6 mln. eq. At the same time, due to a significant increase of the cash, the level of net debt decreased by 3.2% to UAH 487.3 mln. eq. The level of the Issuer's debt burden is rated as acceptable. Sensitivity to currency risk, which is caused by the presence of a foreign currency loan, remains.

PrJSC «KIROVOGRADOBLENERGO» retains the need for significant amounts of capital investment to upgrade fixed assets, taking into account the need for their continuous modernization in accordance with the legislation of Ukraine.

In order to conduct the analytical research the materials provided by PrJSC «KIROVOGRADOBLENERGO» have been used, including: annual financial statements for 2016-2018, background information on the enterprise activities, parameters of the bonds issue, other necessary internal information, expectations of the Rating agency IBI-Rating, as well as the information from the public sources, which the Rating agency considers credible.

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