IBI-Rating has affirmed 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 « evolving» to «positive».

In accordance with the Law of Ukraine «About the Electricity Market» dated 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 by 6 months of 2019, net income of PrJSC «KIROVOGRADOBLENERGO» decreased by 41.6% to the amount of UAH 734 mln, compared to the same period of the previous year, due to the cessation of activities related to the supply of electricity to consumers, in accordance with the introduced legislative amendments. The result of the activity was a net profit in the amount of UAH 68 mln, which is in 40% more than by 6 months of 2018 year. Profitability indicators showed a positive trend. Retained earnings as of June 30, 2019 amounted to UAH 289.9 mln. The share of equity in the general structure of sources of financing activities (financial independence) grew to 62%.

According to the results of January-June 2019, the volume of interest-bearing debt obligations of PrJSC «KIROVOGRADOBLENERGO» decreased by 76.7% - up to UAH 125 mln as of June 30, 2019 due to repayment of a foreign currency bank loan. Net debt (debt reduced by cash) amounted to UAH 90.8 mln, which is in 81.4% less than in the beginning of the year. The level of debt at the end of June 2019 decreased, compared with the beginning of the year, and is estimated as low.

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 and 6 months of 2019, 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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