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31.10.2007
Credit-Rating rates Sumykhimprom`s upcoming issue at uaBBB-
Credit-Rating, a nationally recognized credit rating agency in Ukraine has today assigned UAH50m 5-year registered coupon bonds (B series) issued by Sumy-based Sumykhimprom OJSC (`Issuer` or `company`) a long-term credit rating of uaBBB- (uaBBB minus). The company`s primary activity is producing titanium dioxide, mineral fertilizers, colorants, fodder phosphate and coagulants. In the course of analysis Credit-Rating considered Issuer`s financial statements for 2003-2006 and 1H2007 as well as other inside information furnished by the company.
An obligor or a debt liability with uaBBB credit rating is characterized with the SUFFICIENT creditworthiness as compared to other Ukrainian obligors or debt liabilities. This level of creditworthiness is affected by adverse changes in commercial, financial and economic conditions. The plus (+) or minus (-) modifier denotes rating`s relative status within major categories.
Factors maintaining the credit rating
- The Issuer is a strategic entity for the Ukrainian economy and one of the biggest CIS`s (Commonwealth of Independent States) producers of titanium dioxide, mineral fertilizers, colorants, fodder phosphates and coagulants. The specific gravity of the company in the national production of titanium dioxide accounts for 35 per cent, of sulfuric acid accounts for 30 per cent, of ammoniated superphosphate for 100 per cent, of complex mineral fertilizer for 50 per cent.
- Issuer`s asset balance grew 29.3 per cent to UAH 800.8m in 2004-2006 and 1H2007, the company`s sales rose 75 per cent to UAH579.5m in 2003-2006, the EBITDA grew 46 per cent to UAH46.5m.
Factors constraining the credit rating
- Issuer`s unstable performance in 2003-2006, among the factors causing it was company`s dependency upon environment in overseas markets, the assets` writing-off and their supplementary estimations and by losses incurred under company`s nonspecialized activity.
- According to 2 past years` totals Issuer`s profitability has fallen due to rise in gas price and to disproportional growth in general and financial expenses.
- The company`s debt burden has been rising in the past few years, in fact the debt to equity ratio grew to 43.3 per cent as at Jun. 20, 2007 from 24.9 per cent as at Dec. 31, 2003, with such a tendency being expected to be retained and bolstered by necessity in investments for the renovation of company`s production facilities.
- Uncertainty in nature of company`s possible privatization.
Information on all the credit ratings assigned in accordance with the Ukrainian national scale may be found in the 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
