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19.01.2009
Credit-Rating rates Lugansk Pipe Works CJSC at uaBB
Credit-Rating, a nationally recognized credit rating agency in Ukraine has today announced that it assigned a long-term credit rating of uaBB to Lugansk-based Lugansk Pipe Works CJSC (`company`). The company`s principal activity is manufacturing and selling electrically welded pipes of small and middle diameters. In the course of analysis Credit-Rating considered company`s financial statements for 2003-2007 and 9M2008 and its other inside information.
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.
Factors maintaining the credit rating
- Company`s strong standing in the national sector of pipes of small and middle diameters.
- The company`s is integrated with production cycle of its large shareholder, namely Zaporizhstal OJSC.
- Company`s markets are well diversified (with up to 50% of company`s produce exported).
Factors constraining the credit rating
- Low company`s profitability indicators, with its EBITDA remaining below 2.3% over 2005-2007 and 9M2008.
- Risks associated with the corporate governance, which are imposed by large volume of related party transactions and absence of consolidated financial statements.
- High industry`s cyclicality, prompted by fluctuations in prices of ready products and raw materials.
Information on all credit ratings assigned in accordance with the National Rating Scale may be found in REUTERS and BLOOMBERG information systems.
For more information, please contact:
Information and analytic department
Sergey Rozumyak +38 044 490 25 50
SRozumyak@credit-rating.ua
