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11.07.2007
Bond issue by Shevchenko Agricultural Company assigned uaA credit rating
Credit-Rating, a nationally-recognized credit rating agency in Ukraine has today announced the assignment of the uaA long-term credit rating to UAH30m 3-year issue of registered coupon bonds (B series) by Cherkasy Oblast-based Shevchenko Agricultural Company LLC (`Issuer` or `company`). The company`s principal activity is production and processing the agricultural products. In the course of analysis Credit-Rating considered Issuer`s financial statements for 2002-2006 and 1Q2007 as well as other inside information furnished by the company.
A credit rating of uaA is an investment grade rating, indicating a STRONG CAPACITY to pay both interest and principal on the given debt liability in the Ukrainian financial market environment. This rating indicates a level of creditworthiness that is more susceptible to adverse changes in commercial, financial and economic conditions than debt obligations with uaAAA and uaAA ratings.
Factors maintaining the credit rating
- The Issuer operates both cultivating and processing facilities, and, being incorporated with the Veres group of companies, which is one of the leading Ukrainian canned fruit and vegetable foodstuff producers, the company has an efficient production and sale management and sells its products under well-known brands.
- Issuer`s key performance indicators have been growing over 2003-2006, in fact the company`s assets rose to UAH136.5m from UAH3.3m, the equity grew to UAH72.1m from UAH1.2m, and the net sales grew to UAH131.1m in 2006 as compared to UAH2.4m in 2002.
- High Issuer`s profitability, liquidity and financial strength, specifically 2006 saw sales profitability of 33%, the assets profitability of 33%, the ratio of total liquidity of 2.7%, the financial independence ratio of 0.55.
- Issuer`s 2006 net profit of UAH43.1m exceeds the planned issue size of UAH30m with the EBITDA of UAH48.7m being higher than the UAH33.4m consolidated debt on the financial liabilities as of Dec. 31, 2006.
Factors constraining the credit rating
- Issuer`s activity in the framework of Veres group of companies may impose risks of redistribution of production facilities within the group neglecting the Issuer`s interests and make the Issuer vulnerable to risks of Veres group of companies.
- Growing competition on canned vegetable products market and surplus in production facilities of Ukrainian companies, which may impose risks of overproduction and of excessive supply.
- Issuer`s activity has a seasonable character depending on crop yields and on climate and weather conditions and is vulnerable to State support to agricultural industry.
Information on all the credit ratings assigned in accordance with the Ukrainian national scale may be found in REUTERS, BLOOMBERG and FTN MONITOR information systems.
For further information, please contact:
Information and analytic department
Sergey Rozumyak +38 044 490 25 50
SRozumyak@credit-rating.com.ua
