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26.03.2007
Upcoming bond issue by «YUTiST» CJSC assigned uaBBB credit rating
"Credit-Rating", a nationally-recognized credit rating agency in Ukraine has today announced the assignment of the uaBBB long-term credit rating to the issue of registered coupon bonds (A series) by Nikopol-based "Nikopol plant of steel pipes "YUTiST" CJSC ("the Issuer" or "the company") for the amount of UAH 50m with the 3-year original maturity. The main company`s activity is producing the steel pipes. In the course of analysis the agency used Issuer`s financial statements for 2001-2006 as well as other inside information furnished by the company.
The uaBBB issue rating reflects obligor`s adequate capacity to timely and in full meet its commitments on the obligations 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 obligors with higher ratings.
Factors maintaining the credit rating
- The pipe production is one of the leading industries in Ukraine, being country`s specialization in the global division of labour.
- The Issuer`s modest debt burden, specifically the equity has exceeded the net debt over the entire Issuer`s term of operation, though 2005-2006 saw a tendency to growing debt on financial liabilities (the net debt grew 3.2x up to UAH 110.5m, which is 39.5% of the Issuer`s asset balance).
- The growing Issuer`s key indicators, specifically the period of 2004-2006 saw net sales income grew 1.6x up to UAH 447.2m, the net profit grew 5.3x up to UAH 10.2m, which benefited the company`s performance (the sales profitability increased from 0.69% to 2.27%, the EBITDA from 4.6% to 6.8%).
Factors constraining the credit rating
- Necessity in large investments for company`s technical modernization, which may lead to decrease in free cash-flow.
- High cyclic recurrence of the industry, connected with fluctuations in raw materials` and products` prices.
- A part of company`s main funds are bailed by the bank`s credits.
- Issuer`s vulnerability as an exporter to trade restrictions from the side of other countries and to currency fluctuations, as well as the company`s dependency on a single supplier.
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
