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IBI-Rating has affirmed the credit rating of bonds of ITC LLC «AGROMAT» at uaA grade

24.03.2023
IBI-Rating informs on affirming of the long term credit rating of interest-bearing bonds of «AGROMAT» LLC at uaA grade, with «evolving» outlook. The rating remains on CreditWatch List due to the martial law imposed in connection with Russian invasion of Ukraine, which has a significant negative impact on the economic condition of the country and its financial stability.

«AGROMAT» LLC has been operating since 1993 and currently holds a leading position in the retail segment of ceramic tile, sanitary ware and other related goods sales. The issuer has five individual participants who are residents of Ukraine. The company has its own network of 26 stores as well as a wide dealer network not only in most regional centers but also in dozens of medium and small cities in Ukraine.

In 2022, the volume of goods sold in quantitative terms decreased by 34% compared to 2021. The largest share of the sold products was ceramic tiles - 91%, which amounted to 5.2 million square meters. Other categories, namely friezes and sanitary products, accounted for 4.5% of sales structure. The Issuer's net revenue for 2022 amounted to UAH 2.1 billion, which is 23.3% lower than the result for 2021 and is due to the slowdown in the development of the construction industry due to prolonged military actions in Ukraine caused by aggression from the Russian Federation. The financial result of «AGROMAT» LLC before taxation in 2022 decreased by 47% to UAH 85.2 million (compared to UAH 160.6 million in 2021). The significant improvement in performance indicators in the second half of 2022 should be noted – the Issuer not only managed to cover the losses caused by the invasion of Russian military into Ukraine, but also increase the undistributed profit, which as of the beginning of January of the current year amounted to UAH 889.5 million.

The decision to issue series G bonds in the amount of UAH 100 million with a public offering was made at the general meeting of the issuer's participants according to Protocol No. 1051 dated June 1, 2021. The bonds repayment date: September 25, 2024 – September 27, 2024. The directions for using the raised funds include the organization of new stores and increasing inventory levels.

The affirmation of credit rating of «AGROMAT» LLC bonds is due to: the issuer's leading position in the retail sales segment of ceramic tiles and sanitary products; improvement of efficiency indicators and restoration of profitable operations by the end of 2022; presence of the company's own stores and a well-developed dealer network across the country; high level of capitalization, as well as availability of additional resources in the form of unused credit lines. At the same time, the Rating Agency takes into account the significant volume of import operations, which increases the issuer's sensitivity to currency risk, increasing debt burden, as well as sensitivity to operational and other risks caused by the prolonged military actions in the territory of Ukraine due to aggression from the Russian Federation.

In order to conduct the analytical research the materials provided by «AGROMAT» LLC have been used, including: financial statements for 2020-2022, information on the issue of bonds, other necessary internal information, as well as the information from the public sources, which the Rating agency considers credible.

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