IBI-Rating has affimed the credit rating of A series bonds of «AGROFIRMA «ORSHIVSKA» LLC at uaBBB grade

IBI-Rating informs on the affirmation of the long-term credit rating of interest A series bonds of «AGROFIRMA «ORSHIVSKA» LLC at uaBBB grade with a «stable» outlook. The bonds of par value amounting to UAH 100 mln. were issued to finance the purchase of crop protection agents, mineral fertilizers, seeds, as well as for payment of agricultural services.

«AGROFIRMA «ORSHIVSKA» LLC is a part of one the leading crop production efficiency of the agro-industrial Corporation — «Svarog West Group». The land bank is 80 thousand ha, the main crops are cereals, legumes and sugar beet. During the rating process IBI-Rating agency took into account «AGROFIRMA «ORSHIVSKA» LLC’s forming part of «Svarog West Group», however, the credit rating of the bonds was updated based on the Issuer’s creditworthiness (excluding consolidated financial indicators).

The area of arable agricultural lands of «AGROFIRMA «ORSHIVSKA» LLC in Chernivtsi region is 4thousand ha. The activities of the Issuer, like other agricultural enterprises, are seasonal and sensitive to the impact of natural and climatic conditions.

At the end of 2016, net income of «AGROFIRMA «ORSHIVSKA» LLC decreased to UAH 76.9 million, and net profit to UAH 3 million. For 3 months of 2017, net income increased to UAH 8.8 million, but activity remained unprofitable as a result of increased financial expenses on interest-bearing bonds and bank loans. The growth of debt increased the debt burden of «AGROFIRMA «ORSHIVSKA» LLC.

In order to carry out the analytical research the materials obtained from «AGROFIRMA «ORSHIVSKA» LLC were use, including: the annual financial statements for 2014-2016 and 3 month 2017, parameters of the A series bond issue, other necessary internal information, as well as the information from the public sources, which the Rating agency considers reliable.

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