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 - UAH 5 mln, with redemption in August 2025) and C Series (nominal volume of the issue - UAH 120 mln, with redemption in March 2022) at uaBBB grade, the rating outlook is «evolving».

The «evolving» outlook indicates the expectation of a change in the credit rating throughout the year and is due to the uncertainty regarding with impact on the Issuer's financial environment of the expected significant slowdown in business activity due to economic and administrative restrictions implemented in the Q1 by 2020 due to the deterioration of the epidemiological situation in the country.

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 2019, net income of PrJSC «KIROVOGRADOBLENERGO» decreased by 45% to UAH 1,399.9 mln, compared to the previous year, due to the cessation of activities related to the supply of electricity to consumers, in accordance with the introduced legislative amendments. At the same time, net profit amounted to UAH 116.8 mln, against UAH 290.4 mln net loss for the previous year. Profitability indicators showed a positive trend. Retained earnings amounted to UAH 438.4 mln as on 31/12/2019. The share of equity in the general structure of financing sources activities (financial independence) increased to 67%.

In 2019, the interest-bearing debt obligations of PrJSC «KIROVOGRADOBLENERGO» decreased by 76.5% to UAH 125.3 mln as of 31/12/2019 due to repayment of a foreign currency bank loan. Net debt (debt reduced by cash) amounted to UAH 88 mln, which is in 82% less than in the beginning of the year. The level of debt at the end of 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 2017-2019, 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.

Corporate department

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