IBI-Rating has updated the credit ratings of «ODESAOBLENERGO» PrJSC and its bonds

Rating agency IBI-Rating informs on affirming of the long-term credit ratings of «ODESAOBLENERGO» PrJSC at uaBBB- grade, with a «stable» outlook. The credit rating of the interest-bearing secured B series bonds (nominal volume of the issue amount UAH 500 mln., with redemption in 2022) is affirmed at uaBBB grade, with a «stable» outlook.

«ODESAOBLENERGO» PrJSC is engaged in the electricity transmission and supply by local grids to consumers of Odesa region. The Company has the necessary licenses with an unlimited validity period to carry out the above-mentioned activities. «ODESAOBLENERGO» PrJSC is a natural monopoly in Odessa region in the transmission and supply of electricity at regulated tariffs, which ensures stable sales.

By the results of 2017, the volume of productive electricity supplies to own consumers of «ODESAOBLENERGO» PrJSC decreased by 0.9%. The periodic increase in tariffs for end-users, some of which have insufficient solvency, causes a further increase in arrears for consumed electricity. The largest debtors remained the population and enterprises of the housing and communal services sector.

Net income of «ODESAOBLENERGO» PrJSC by 2017 increased by 23%, as compared with the previous year, amounting to UAH 7,520.5 mln. There was an increase in all major components of net income, the largest one remaining the electricity supplies to legal entities (accounting for about 70% of the total structure). The activity of «ODESAOBLENERGO» PrJSC by the results of 2017 was profitable - net profit amounted to UAH 5 mln, against UAH 68.8 mln for the previous year.

The growth in the net debt of «ODESAOBLENERGO» PrJSC during 2017 was occurred at a lower rate pace compared with an increase in the estimated index EBITDA, as a result of which the Issuer's debt load decreased in comparison with 2016, and is estimated as acceptable. The sensitivity to foreign exchange risk remains, due to the availability of foreign currency loans.

The Issuer’s keep need in considerable amounts of capital investments in renewal of fixed assets remains, given the need for constant upgrading of fixed assets according to the legislation of Ukraine. For the 2017, the amount of financing under the investment program of «ODESAOBLENERGO» PrJSC amounted to UAH 321.6 mln. on the investment program, which is 100% of the planned. The main directions (accounting for 75% of the total amount of financing) were the construction, modernization and reconstruction of the electrical grids and equipment.

In order to conduct the analytical research the materials provided by «ODESAOBLENERGO» PrJSC have been used, including: annual financial statements for 2015-2017, background information on the enterprise activities, parameters of the B series 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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