RA Expert-Rating’s credit rating of KSG Agro has been updated to the level uaА +

On December 10, 2021, the RA Expert-Rating rating committee made a decision to update the long-term credit rating of KSG Agro: on the national scale at uaA + and on the agency’s international scale at BBB. This was reported by the agricultural holding’s press service.
According to the agency, KSG Agro with a uaA rating is characterized by high creditworthiness compared to other Ukrainian borrowers or debt instruments. The creditworthiness level is sensitive to the impact of unfavorable commercial, financial and economic conditions. The agency updated its credit rating after analyzing the data from the consolidated statements of KSG Agro for the nine months of 2021.
Commenting on the update of the KSG Agro rating at a sufficiently high level, the experts of RA Expert-Rating noted: “For the period from September 30, 2020 to September 30, 2021, the equity capital of KSG Agro S.A. increased by 1.55 times to $ 19.96 million. The main factor behind the growth of the company’s equity capital was its profitable activities and the reduction in retained losses. Obligations of KSG Agro S.A. during the analyzed period decreased by 7.37% to $ 53.96 million. The corresponding movement of indicators led to an increase in the analyzed period of the ratio between equity capital and liabilities of KSG Agro S.A. by 14.87 p.p. up to 36.98%. Growth in the level of provision of KSG Agro S.A.’s own capital is assessed positively by us”. The Agency also considers a positive trend to be a decrease in the volume of short-term loans by 43.97% for the period from September 30, 2020 to September 30, 2021, to $ 2.51 million, and an increase in long-term loans in the structure of long-term liabilities of KSG Agro as of September 30. 2021 by 9.55% – up to $ 27.19 million.
Experts noted that the volume of sales of the company’s products in the period under review increased significantly. “In particular, income from sales for the nine months of 2021 compared to the same period in 2020 increased by 42.78% to $ 20.94 million. At the same time, the volume of net profit for the three quarters of 2021 amounted to $ 17.28 million, which 3.63 times higher than the indicator for the three quarters of 2020. The main factor of the company’s profit growth in the period under review was sales of its subsidiaries and an increase in product sales. Increase in financial results of KSG Agro S.A. led to a significant increase in its profitability indicators”.
Analysis of the consolidated financial statements of KSG Agro S.A. showed that EBITDA for the first nine months of 2021 compared to the same period in 2020 increased by 10.46% to $ 7.35 million, and the ratio between the amount of EBITDA for three quarters of 2021 and the volume of loans as of September 30, 2021 increased up to 26.53%. The corresponding level of this indicator testifies to the company’s ability to service its debt obligations. Thus, having analyzed the consolidated financial statements of KSG Agro S.A. for nine months of 2021, the agency notes an increase in the level of coverage by equity capital, an increase in sales revenue and net profit of the company, as well as a good level of ratio between EBITDA and loans.
Recall that on June 8, 2021, at a meeting of the RA Expert-Rating’s rating committee, it was decided to assign a credit rating to the KSG Agro agricultural holding at the level of uaA + according to the national rating scale. In addition, the holding was assigned a BBB rating on an international scale (for comparison: Ukraine’s rating as a country is at the B level). On September 10, 2021, these ratings were affirmed by the agency.