IBI-Rating has upgraded the credit ratings of «Ukrzaliznytsia» JSC

IBI-Rating informs on upgrading of the long-term credit rating of «Ukrzaliznytsia» JSC from uaBBВ- to uaBBВ grade, keeping outlook «in development».

According to the consolidated financial statements, compiled under IFRS, net income of «Ukrzaliznytsia» JSC according to the results by 2018 increased by 12.8% and amounted to UAH 83,402.4 million, as compared to the 2017, net profit increased by 78% to UAH 203.9 million. Net income for 3 months of 2019, increased to UAH 21,250 million (+ 5.2%) and net profit amounted to UAH 0.5 million.

The commitments of borrowings in 2018 by «Ukrzaliznytsia» JSC decreased due to the gradual repayment of bank loans, as well as the revaluation of currency liabilities as a result of the hryvnia appreciation. The sensitivity of currency risk is partially reduced by the presence of currency revenues from transit traffic and the launch of quasi-hedged instruments. After the last reporting date, «Ukrzaliznytsia» JSC placed a new issue of 5-year Eurobonds with a nominal volume of USD 500 million, which improves the debt structure.

«Ukrzaliznytsia» JSC is formed on the basis of the State Administration of Railway Transport, enterprises and institutions of public railway transport, which are reorganized by merger. «Ukrzaliznytsia» JSC 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» JSC, due to high wear and tear.

Materials used for conducting the analytical research were obtained from «Ukrzaliznytsia» JSC, including: financial statements for 2016-2018 and 3 months of 2019, reference information on the activities of «Ukrzaliznytsia» JSC, 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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