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02.02.2007
Volatility in «Aerosvit» company`s contractual relationships with its fuel suppliers does not impact company`s credit rating
"Credit-Rating", a nationally-recognized credit rating agency in Ukraine has today said that volatility in CJSC "Aerosvit Airlines" company`s relationships with its fuel suppliers shall not have an immediate influence upon uaA/Stable company`s credit rating.
Validity of company`s contracts with KREBO ("Ukrtatnafta" CJSC) and "Luk-Avia Oil" ("Lukoil Ukraine") on fuel purchase expired on 31 Jan. 2007. According to "Aerosvit Airlines", the suppliers claimed a 20% raise in prices from 1 Feb. 2007, albeit there`s retained a tendency of decline in oil products prices on international market. The negotiations on fuel supply terms are being underway and price level is still uncertain.
"Credit-Rating" is watching on the situation proceed, and thinks that negative results of the negotiations may adversely impact company`s financial performance, taking into account the fact that the specific gravity of fuel expenses in company`s expenditures is over 30%.
"Aerosvit" is the biggest carrier in Ukraine, in fact the company`s specific gravity in total air passenger turnover in Ukraine exceeds 30%, with 9M2006 net sales profit amounting to UAH 1.1bn
The uaA issuer rating reflects an obligor`s strong capacity to pay a debt liability given, it may, though, be more vulnerable to adverse changes in economic, financial and business conditions than issuers rated uaAA and uaAAA.
Information on all the credit ratings assigned in accordance with the Ukrainian national scale may 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
