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IBI-Rating has affirmed the credit rating of series A bonds of "Concern" Simeks-Agro" at uaBBB grade

31.03.2016
Rating agency IBI-Rating informs on the affirmation of the long-term credit rating of series A coupon bonds of the issuer «Concern «Simeks Agro» LTD at uaBBB grade maintaining a «positive» outlook.

Bonds with a total nominal value of UAH 110 million maturing in August 2019 were issued to finance the purchase raw materials and supplies, as well as updating of equipment and mechanisms.

«Concern «Simeks Agro» LTD forms a part of the vertically integrated agricultural holding «TAS AGRO». The Issuer is engaged in cultivation of cereals and oilseed crops on the farmland with a total area of 12.5 thousand ha in Lipovetsky district of Vinnytsa oblast’. Activities of the Issuer, as well as other domestic agricultural enterprises, are highly sensitive to the impact of such factors as climatic conditions and government regulation of the industry.

Based on the results of 2015, net income of "Concern" Simeks-Agro" amounted to UAH 327.3 million, which was by 90,6% more than in the previous year. A significant increase was due to a significant increase in prices for agricultural products sold. The issuer demonstrates high performance indicators, namely: net profit in 2015 amounted to UAH 178.2 million, return on sales accounted for 54.4%.

At the end of 2015 the vast majority of the obligations of "Concern" Simeks-Agro" LTD consisted of long-term liabilities, which were mainly formed by obligations on the placed interest-bearing bonds. It should be noted that the Issuer’s debt obligations are denominated in hryvnia, which reduces the Issuer's sensitivity to foreign exchange risk in conditions of the hryvnia devaluation. The share of equity capital in the Issuer’s total sources of financing as at 31.12.2015 grew to 70%, indicating the increase in the enterprise's financial independence. Despite the increase in debt as a result of the re-placement of previously bought out bonds, the debt burden of "Concern" Simeks-Agro", based on the results of 2015, decreased due to outstripping growth of financial results. Thus, the ratio of net debt (liabilities on bonds, reduced by the amount of cash) and EBITDA amounted to 0.5x versus 0.8x based on the results of 2014.

Upgrading of the credit rating of bonds is possible in the event of continued upward trend of financial results while maintaining high profitability indicators and low level of debt burden. Downgrading of the credit rating of bonds is possible in the event of default ondebt obligations, significant reduction in financial results and performance indicators, growth of debt burden, deterioration of the political and economic situation in the country.

In order to perform the analytical research the materials provided by "Concern" Simeks-Agro" LTD were used, including annual financial statements for 2013-2015, parameters of the issue of series A bonds, other necessary internal information, as well as the information from the public sources, which the rating agency considers reliable.

Corporate department
For more information please contact:
Press service of IBI-Rating
(044) 362-90-84
press(at)ibi.com.ua