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 series (nominal volume of the issue amount UAH 5 mln., with redemption in August 2025) and C series (nominal volume of the issue amount UAH 120 mln., with redemption in March 2022) at uaBBB grade, with a «stable» outlook.

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

Following the results of first 6 months of 2018, PrJSC «KIROVOGRADOBLENERGO» reduced the useful supply of electricity to its consumers by 4.2%. Consumer debt for electricity in January-June 2018 decreased. The largest debtors remained the population and enterprises of the housing and communal services sector.

Net income of PrJSC «KIROVOGRADOBLENERGO» for 6 months of 2018 increased by 7.3%, amounting to UAH 1,256.3 mln. There is an increase in the main components of net income, the key of which is the supply of electricity to the legal entities (67% in the overall structure). By the results of the first 6 months of 2018 the Issuer received net profit in amount of UAH 48.6 mln.

The reduction in net debt of KIROVOGRADOBLENERGO in January-June 2018 resulted in a slight decrease in the debt burden, despite some decrease in financial results. The level of the Issuer's debt load is assessed as acceptable. Sensitivity to foreign currency risk remained because of the existing foreign currency denominated loan.

PrJSC «KIROVOGRADOBLENERGO» 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.

In order to conduct the analytical research the materials provided by PrJSC «KIROVOGRADOBLENERGO» have been used, including: annual financial statements for 2015-2017 and 6 months of 2018, 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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