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IBI-Rating has updated the credit ratings of PrJSC «EC «ZHYTOMYROBLENERGO» and has determined the credit ratings of its bonds

10.11.2017
Rating agency IBI-Rating informs on affirming of the long-term credit ratings of PrJSC «EC «ZHYTOMYROBLENERGO» at uaBBB grade, with a «stable» outlook. The credit rating of the interest-bearing secured C series bonds (nominal volume of the issue amount UAH 100 mln., with redemption in 2022) is determined at uaBBB grade, with a «stable» outlook. These bonds were issued for the purpose of converting B-Series bonds whose credit rating was withdrawn.

PrJSC «EC «ZHYTOMYROBLENERGO» is engaged in electricity transmission and supply by local power grids to consumers of Zhytomyr region. In order to conduct the above-mentioned activities, Company has the necessary licenses with an unlimited validity period. The PrJSC «EC «ZHYTOMYROBLENERGO» is a natural monopoly on the territory of Zhytomyr region on electricity transmission and supply at regulated tariffs, which ensures stability of sales.

In the first half of 2017, the volume of productive electricity supplies to own consumers of PrJSC «EC «ZHYTOMYROBLENERGO» increased by 2.5%. The transit of electricity by the Issuer’s decreased by 7%, the share of revenue generated by this type of activity in the general revenue structure remained insignificant. The periodic increase in tariffs for end users causes a further increase in the debt for consumed electricity. The largest debtors remained the population and enterprises of the housing and communal services sector.

As a result of 6 months of 2017 growth of the net income of PrJSC «EC «ZHYTOMYROBLENERGO» amount 44% - up to UAH 1 567.5 mln. It is noted the growth in all components of the net income, the main of which is the supply of electricity to legal entities (78% in the overall structure). By the results of 6 months of 2017 the Issuer received UAH 92.6 mln. of the net profit, against UAH 45.4 mln. for 6 months of 2016 year.

During January-June of 2017, the liabilities of PrJSC «EC «ZHYTOMYROBLENERGO» decreased by 4% due to revaluation of liabilities under сurrency loans as a result of the appreciation of the hryvnia (with the same amount of commitment in the currency of the loan) while liabilities on interest-bearing bonds did not change. The reduction in the volume of net debt, while improving financial results, led to a decrease in the Issuer's debt burden, the level of which is estimated as low.

Due to the availability of foreign currency loans, remains the sensitivity to foreign currency risk. The Issuer’s 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. The amount of financing of the investment program of PrJSC «EC «ZHYTOMYROBLENERGO» during June-September 2017 amounted to UAH 118.7 mln.

In order to conduct the analytical research the materials provided by PrJSC «EC «ZHYTOMYROBLENERGO» have been used, including: annual financial statements for 2014-2016 and 6 months of 2017, background information on the enterprise activities, parameters of the series C 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
For more information please contact:
Press service of IBI-Rating
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press(at)ibi.com.ua