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22.03.2006
"uaBB" credit rating assigned to upcoming bond issue of "Molochnyi Dom", Ltd
Today independent rating agency Credit-Rating announced the granting of a long-term "uaBB" credit rating to registered interest-bearing bond issue in the amount of UAH 30 million with a circulation period of 3 years. Main trends of the companys activity are production, wholesale and retail trade of food products. Credit-rating agency in the analysis process used complete financial reports by Molochny Dom, Ltd for 2003-2005 as well as other inside information provided by the company.
Factors supporting the credit ratings level:
- Molochny Dom, Ltd takes 5.5% of the national dairy product market and is one of the leading companies in the glazed cheese segment where the company owns 19% of the market;
- A number of performance showings of Molochny Dom, Ltd improved during 2003-2005: operating income by 1.5 times to UAH 5 million, net income by 1.5 times to UAH 1.3 million, EBITDA almost 2 times to UAH 7.3 million;
- Molochny Dom, Ltd operates in the market where average annual growth rates are expected to be 10-12% in 5 next years;
- The enterprise has a possibility of increasing production: by the results of 2005 the production capacities are about 55% loaded;
- Positive experience of offering, serving and redeeming bonds with total volume of UAH 10 million.
Factors restricting the credit ratings level:
- Low financial stability of Molochny Dom, Ltd: financial independence index did not exceed 0.038 in 2003-2005;
- Trade marks that the Issuer uses for its production belong to other companies members of FUNNY, Inc.;
- Intense competition in the dairy product market especially in the segment of high margin products that the company specializes in;
- High risks related to the Issuers ambitious development strategy, in particular planed growth rates of produce sales volumes for 2006 exceed the expected growth rates of the market by 3 times;
- The industrys high susceptibility to fluctuations of prices on milk in particular due to production seasonality; considerable administrative regulation in the industry.
For more detailed information, please contact
us.
Kyiv (+38044 490 25 50, fax +38044 490 25 54)
