IBI-Rating has affirmed the credit rating of A series bonds of "Zernogrupa Ltd" LLC at uaBBB grade

IBI-Rating informs on the affirmation of the long-term credit rating of A series interest-bearing bonds of "Zernogrupa LTD" LLC at uaBBB grade with a «stable» outlook.

"Zernogrupa Ltd" LLC forms a part of a vertically integrated agricultural holding "TAS AGRO". Bonds of "Zernogrupa Ltd" LLC of nominal value of UAH 20 million, maturing in May 2020, were issued to finance the purchase of raw materials and supplies, as well as the upgrading of equipment and machinery. The Issuer owns grain elevators in Pohrebyshche district of Vinnytsia oblast’ and provides services for reception, drying, cleaning, storage and shipment of products to agricultural producers. Activities of "Zernogrupa Ltd" LLC depend on the condition of the agricultural sector, which is characterized by a high sensitivity to the impact of such factors as natural and climatic conditions, government regulation, prices for oil products and chemical fertilizers. The seasonality of the Issuer's activity, which leads to fluctuations in the working capital, is also worth noting.

Based on the results of 3 quarters of 2015 "Zernogrupa Ltd" LLC received net profit in the amount of UAH 8,060 thousand, and the return on sales and return on assets accounted for 15.6% and 19.1%, respectively, indicating on the effective management of its economic activities . A significant part of revenues was generated by the sale of products for export, which provided foreign exchange earnings and contributed to the reduction of the Issuer's sensitivity to fluctuations in exchange rates. As a result of the placement of bonds, the debt burden increased, but it remained at an acceptable level.

At the moment, the Agency sees no reason to raise the credit rating grade. A negative impact on the credit rating grade may have, as follows: non-fulfillment of debt obligations, decline in financial results and performance indicators, a significant increase in the level of debt burden, deterioration of the political and economic situation in the country.

In order to carry out the analytical research the materials provided by "Zernogrupa Ltd" LLC were used, including: financial statements for 2013-2014 and 9 months of 2015, background information on the activities of "Zernogrupa Ltd" LLC, information on the issue of A series bonds, other necessary internal information as well as the information from the public sources, which the Rating agency considers reliable.

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