print
16.02.2007
Upcoming bond issue by «Galychina» CJSC assigned uaBB+ (uaBB plus) credit rating
"Credit-Rating", a nationally-recognized credit rating agency in Ukraine has today announced the assignment of the uaBB+ (uaBB plus) long-term credit rating to the issue of registered coupon bonds (A, B series) by "Galichyna" CJSC for the amount of UAH 30m with the 3-year original maturity. The main company`s activity is production of whole milk products and of dry defatted milk, butter and cheese. In the course of analysis the "Credit-Rating" agency used Issuer`s financial statements for 2002-9M2006 as well as other inside information furnished by the company.
The issues rated uaBB are the least affected by the risk of non-payment of the principal and interest within the speculative grade. The obligor, however, may be impaired to timely and in full meet its commitments on the obligation in the Ukrainian financial market environment in the event of adverse changes in business, financial and economic conditions. However, the possibility of nonpayment is low in the near future. The "+" and "-" modifiers denote rating`s relative status within major categories.
Factors supporting the credit rating
- The company is one of Ukrainian dairy market leaders.
- Growth in key financial and economic indicators, specifically the assets grew 5x
over
2002 9M2006 (up to UAH 74.4m), the net sales profit grew 5.9x up to UAH 112.5m - High broadening of assortment and optimization of its structure, particularly at the expense of increase in specific gravity of dairy products high marginal groups.
Factors constraining the credit rating
- The issue size 1.8x exceeds the Issuer`s own capital as of 30 Sep. 2006.
- Low liquidity indicators and negative net working capital over the past 2 years
(the common liquidity ratio was 0.8, quick liquidity ratio was 0.6, net working capital
UAH (-)8,537K as of 30 Sep. 2006) - Severe competition on dairy market, especially in high-marginal products` niche the company is aiming its development at.
- Dairy realm`s high vulnerability to fluctuations in milk prices, connected with its seasonality of production, to reduction in raw basis, significant administrative regulation.
- Risks incurred under company`s aggressive development strategy.
Information on all the credit ratings assigned in accordance with the Ukrainian national scale may be found at 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
