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 and C Series at uaBBB grade, with «negative» outlook. The rating has been kept on the Credit Watch List due to the martial law imposed in connection with the outbreak of Russia's war against Ukraine, as well as active hostilities on the territory of Ukraine, which has a significant negative impact on the country's economic situation and financial stability.

The PrJSC «KIROVOGRADOBLENERGO» is a natural monopoly on the territory of Kirovograd oblast, which ensures stability of sales. As of the beginning of April 2023, DTEK Grids LLC owned 24.5% of the shares in PrJSC «KIROVOGRADOBLENERGO». VS Energy International N.V. (Netherlands) remained the controlling shareholder with 51.6%. Another 21.3% of shares are owned by VS GROUP MANAGEMENT LLC. The net income of PrJSC «KIROVOGRADOBLENERGO» in 2022 and the first quarter of 2023 amounted to UAH 2 billion and UAH 612.7 million, respectively, which is slightly less than in previous years.

In 2022, PrJSC «KIROVOGRADOBLENERGO» reported a net profit of UAH 30.9 million, which is 86% less than in 2021. In the first quarter of 2023, PrJSC «KIROVOGRADOBLENERGO» reported a net loss of UAH 4.7 million. Due to the crediting of capital in revaluation surplus, retained earnings increased to UAH 1.2 billion (+1.8% since the beginning of the year), which contributes to the stability of equity. Accordingly, the share of equity in the total structure of sources of financing activities (financial independence) is 79%. According to the results of 2022 and the first quarter of 2023, the amount of interest-bearing debt obligations of PrJSC «KIROVOGRADOBLENERGO» decreased by 52% and amounted to UAH 41.1 million as of 31.03.2023. The net debt amounted to UAH 34.3 million, which is 12% less compared to the beginning of last year. The level of debt burden is estimated by the Rating Agency as low. In turn, PrJSC «KIROVOGRADOBLENERGO» retains the need for significant amounts of capital investments to renew fixed assets, given the need for their constant modernization in accordance with the legislation of Ukraine and the restoration of damaged infrastructure.

In order to conduct the analytical research the materials provided by PrJSC «KIROVOGRADOBLENERGO» have been used, including: annual financial statements for 2020-2022 and 3 months of 2023, 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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