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IBI-Rating has updated the credit rating and the rating of investment attractiveness of Sumy City Territorial Community
11.09.2024
National rating agency IBI-Rating informs on affirming of the credit rating of Sumy City Territorial Community at uaA– grade with «negative» outlook and CreditWatch listing, as well as the rating of investment attractiveness at invA– grade.
Such rating grades represent the high ability of the city to pay off its financial commitments and high investment attractiveness. The notation «–» indicates an intermediate rating category relative to the main category. The negative outlook indicates a high probability of credit rating downgrade during the year. The negative outlook and Credit Watch listing are due to the deterioration of operating conditions and increased uncertainty about the prospects for economic development against the backdrop of prolonged hostilities on the territory of Ukraine caused by RF aggression.
Were taken into account:
1. The structure of the economic complex and effectiveness of financial policy
Sumy City Territorial Community has rather high indicators of socio-economic development. More than 400 economically active industrial enterprises operate in the community. The Community has a developed network of retailers, restaurants and enterprises providing consumer services to the population.
According to the results of 2023, the budget revenues of Sumy City Territorial Community amounted to UAH 3.3 billion (85.28% of the approved plan). At the same time, own revenues amounted to 82.55% of the total. In January-June 2024, the volume of revenues amounted to UAH 1.86 billion, which is 51.6% of the approved plan for the year and 11.39% higher than the volume of revenues for the first half of 2023.
As of 01.07.2024, the debt of the budget of Sumy City Territorial Community amounted to UAH 126.28 million (4.4% of the planned indicators of own revenues for 2024). The ratio of consolidated debt to the planned indicators of own budget revenues for 2024 is 10.14%.
The debt burden on the revenue side of the budget is low, which allows the city authorities to count on attracting additional financial resources, including loans, to finance the community's socio-economic development.
During 2023 and the first half of 2024, the Community suffered from rocket attacks by the Russian Federation, which negatively affects the operating conditions of enterprises. There was damage to property and buildings in the community due to hostilities, which created the need to spend community budget funds on their restoration.
2. Investment potential
Sumy city has a well-developed transportation system. There is a large railway station in the city; 2 national highways and 3 regional highways pass through Sumy City Territorial Community. There is a bus station that provides international and intercity transportation. There is also a suburban bus station. Sumy Airport is located within the city limits (owned by Sumy Regional Council).
There are 2 mineral deposits on the territory of Sumy City Territorial Community: a deposit of construction sand and a deposit of brick raw materials.
Sumy City Territorial Community is sufficiently provided with qualified personnel and has a strong human resources potential: the main higher and secondary specialized educational institutions of the region are concentrated in the city.
There is a developed trade, industrial and business infrastructure. Work is underway to create the Sumy Industrial Park. According to preliminary estimates, up to 1,050 new jobs can be created on the territory of the industrial park. On November 30, 2023, an agreement on the establishment and operation of the industrial park was signed with the Municipal Enterprise “Electroavtotrans”, which acquired the status of the management company of the Sumy Industrial Park.
The priority types of activities to be located in the industrial park are as follows:
Such rating grades represent the high ability of the city to pay off its financial commitments and high investment attractiveness. The notation «–» indicates an intermediate rating category relative to the main category. The negative outlook indicates a high probability of credit rating downgrade during the year. The negative outlook and Credit Watch listing are due to the deterioration of operating conditions and increased uncertainty about the prospects for economic development against the backdrop of prolonged hostilities on the territory of Ukraine caused by RF aggression.
Were taken into account:
1. The structure of the economic complex and effectiveness of financial policy
Sumy City Territorial Community has rather high indicators of socio-economic development. More than 400 economically active industrial enterprises operate in the community. The Community has a developed network of retailers, restaurants and enterprises providing consumer services to the population.
According to the results of 2023, the budget revenues of Sumy City Territorial Community amounted to UAH 3.3 billion (85.28% of the approved plan). At the same time, own revenues amounted to 82.55% of the total. In January-June 2024, the volume of revenues amounted to UAH 1.86 billion, which is 51.6% of the approved plan for the year and 11.39% higher than the volume of revenues for the first half of 2023.
As of 01.07.2024, the debt of the budget of Sumy City Territorial Community amounted to UAH 126.28 million (4.4% of the planned indicators of own revenues for 2024). The ratio of consolidated debt to the planned indicators of own budget revenues for 2024 is 10.14%.
The debt burden on the revenue side of the budget is low, which allows the city authorities to count on attracting additional financial resources, including loans, to finance the community's socio-economic development.
During 2023 and the first half of 2024, the Community suffered from rocket attacks by the Russian Federation, which negatively affects the operating conditions of enterprises. There was damage to property and buildings in the community due to hostilities, which created the need to spend community budget funds on their restoration.
2. Investment potential
Sumy city has a well-developed transportation system. There is a large railway station in the city; 2 national highways and 3 regional highways pass through Sumy City Territorial Community. There is a bus station that provides international and intercity transportation. There is also a suburban bus station. Sumy Airport is located within the city limits (owned by Sumy Regional Council).
There are 2 mineral deposits on the territory of Sumy City Territorial Community: a deposit of construction sand and a deposit of brick raw materials.
Sumy City Territorial Community is sufficiently provided with qualified personnel and has a strong human resources potential: the main higher and secondary specialized educational institutions of the region are concentrated in the city.
There is a developed trade, industrial and business infrastructure. Work is underway to create the Sumy Industrial Park. According to preliminary estimates, up to 1,050 new jobs can be created on the territory of the industrial park. On November 30, 2023, an agreement on the establishment and operation of the industrial park was signed with the Municipal Enterprise “Electroavtotrans”, which acquired the status of the management company of the Sumy Industrial Park.
The priority types of activities to be located in the industrial park are as follows:
- processing industry, production of finished metal products, metalworking and machine building; production of components for automobiles; production of rubber and plastic products; woodworking enterprise;
- research and development activities;
- other industries compatible with the above, such as transportation and warehousing, including (preparation and storage of agricultural products; logistics complex).
The Community has a Targeted program to support small and medium-sized enterprises of Sumy City Territorial Community for 2022-2024. Most local tax rates are lower than the maximum level stipulated by law, which creates conditions for the development of entrepreneurship. Since June 2019, the Sumy Business Hub has been operating in Sumy city, an open space for cooperation, training and exchange of ideas among representatives of Sumy business community, which hosts various events on the development of small and medium-sized businesses. Sumy City Council has a coordinating council for entrepreneurship development.
The city authorities are constantly taking measures to facilitate the attraction of investments from alternative sources. By the decision of the Executive Committee of 22.07.2022, the «Program for the Development of International Cooperation and Promotion of a Positive Investment Image of Sumy City Territorial Community for 2022-2024» was approved. Sumy City Council has experience in successfully implementing numerous investment projects with the participation of international financial and donor organizations. However, the ongoing shelling of the community makes it difficult to carry out investment activities.
In order to conduct the analytical research, the materials obtained from Sumy City Council have been used, including: indicators of the social and economic development, statistical data, treasury statements, program materials, other necessary internal information, as well as the information from the public sources, which the Rating agency considers credible.
Municipal department
For more information please contact:
Press service of IBI-Rating
(044) 362-90-84
press(at)ibi.com.ua
The city authorities are constantly taking measures to facilitate the attraction of investments from alternative sources. By the decision of the Executive Committee of 22.07.2022, the «Program for the Development of International Cooperation and Promotion of a Positive Investment Image of Sumy City Territorial Community for 2022-2024» was approved. Sumy City Council has experience in successfully implementing numerous investment projects with the participation of international financial and donor organizations. However, the ongoing shelling of the community makes it difficult to carry out investment activities.
In order to conduct the analytical research, the materials obtained from Sumy City Council have been used, including: indicators of the social and economic development, statistical data, treasury statements, program materials, other necessary internal information, as well as the information from the public sources, which the Rating agency considers credible.
Municipal department
For more information please contact:
Press service of IBI-Rating
(044) 362-90-84
press(at)ibi.com.ua