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19.12.2006
The bond issue by «Cherkasy Battery Farm» LLC assigned uaBBB+ (uaBBB plus) credit rating
"Credit-Rating", a nationally-recognized credit rating agency in Ukraine has today announced the assignment of the uaBBB+ (uaBBB plus) long-term credit rating to the issue of the registered coupon bonds (of B series) by Cherkasy-based "Cherkasy Battery Farm" LLC ("the Issuer" or "the company") for the amount of UAH 30m with the 3-year original maturity. The main companys activity is producing and supplying the broilers meat on the Ukrainian market. In the course of analysis the "Credit-Rating" agency used Issuers 2003 1H 2006 financial reports, as well as other inside information furnished by the company.
The uaBBB issuer rating reflects adequate capacity of an obligor to timely and in full pay the given debt liability in the Ukrainian financial market environment, there is, though, a higher vulnerability to the effect of adverse changes in business, financial and economic conditions as compared to the debt liabilities with higher ratings. The "+" and "-" modifiers denote ratings relative status within major categories.
Factors supporting the credit rating
- Issuers strengthening positions on the growing national poultry market: the companys specific gravity in Ukrainian poultry production increased from 2.2% in 2005 to 3.3% for 9 months of 2006.
- The companys active development has contributed to growth in major indicators: the volume of output counted in natural numbers grew 13x over 2003 9 months of 2006 (up to 4.9m heads), the assets grew 16x over 2003 1H 2006 (UAH 109.6m as of 1 Jul. 2006), the net sales income grew 8.5x over 2003-2005 (UAH 52.7m in 2005).
- Growth in companys performance indicators over 2003 1 Jul. 2006, specifically the production profitability grew from 39.48% to 84.84%, sales profitability from 18.25% to 41.38%, total liquidity ratio from 0.81 to 4.22, quick liquidity ratio from 0.69 to 3.58
- Well-organized management allows the company to demonstrate sound production and business performance.
Factors constraining the credit rating
- Risks incurred by the Issuers ambitious development strategy, which may lead to increase in debt burden.
- Growing competition on the Ukrainian poultry market.
- Companys dependency on state regulatory measures in agricultural field.
Information on all the credit ratings assigned in accordance with the Ukrainian national scale may also be found in the REUTERS and BLOOMBERG information systems.
For further information, please contact:
Information and analytic department
Sergey Rozumyak +38 044 490 25 50
SRozumyak@credit-rating.com.ua
