KSG Agro has been assigned the uaA + credit rating from the Expert-Rating agency

On June 8, 2021, KSG Agro agricultural holding was assigned the uaA + credit rating from the Expert-Rating agency according to the national rating scale. This was reported by the press service of the agricultural holding.
On June 8, 2021, at a meeting of the rating committee of RA Expert-Rating, it was decided to assign a credit rating to KSG Agro agricultural holding at the level of uaA + according to the national rating scale. In addition, the holding received the BBB rating on an international scale (for comparison: Ukraine’s rating as a country is at B level). A company with such ratings, in this case KSG Agro, has a higher creditworthiness compared to other borrowers (http://expert-rating.com/rus/rating-list_individualnye_reitingi_promyshlennye_kompanii_ksg_agro_s.a._prisvoeno_reiting_kompanii_ksg_agro_s.a.a).
Arguing the assignment of a sufficiently high rating to KSG Agro agricultural holding, analysts of the Expert-Rating agency noted: “As at March 31, 2021, the share of loans in KSG Agro’s liabilities amounted to 47.7%, namely: short-term loans – 5.12%, long-term – 42.58%. As at the beginning of 2021, the equity capital of KSG Agro covered loans from banks by 44.16%, and by 19.64% – the total volume of loans from banks and the parent company. In 2020-2021, the holding’s management carried out measures aimed at improving its credit history by fully repaying and restructuring overdue debts on bank loans. At the end of 2020, in comparison with 2019, the ratio between EBITDA and total liabilities of the company increased by 8.04 p.p. to 11.35%, the ratio between EBITDA and the total volume of loans received by KSG Agro increased by 16.70 p.p. to 23.94%, and the ratio between EBITDA and bank loans increased by 34.81 p.p. up to 54.28%. The current level of EBITDA of KSG Agro covers a significant share of the company’s interest-bearing liabilities, and by the end of 2020, more than four times the cost of paying interest on loans, and more than three times the total financial costs of the holding. This means that the company is able to generate a significant amount of revenue that can be used to finance continuing operations and debt service.”
Analyzing the dynamics of the shares of the agricultural holding on the Warsaw Stock Exchange (WSE), the agency’s analysts note: “In the period from January 1, 2020 to May 17, 2021, the share price of KSG Agro on the WSE increased 2.83 times: from PLN 1.2 to PLN 3.40. The more the share price on the stock exchange grows, the better the company’s chances will be to raise additional capital through an SPO and even replace part of the borrowed resources with its own funds. In addition, the listing of KSG Agro shares on the WSE contributes to the improvement of corporate governance practices in the holding.”
Commenting on the rating assigned by KSG Agro, the Chairman of the Board of Directors at KSG Agro stressed: “The assignment of a rating at the uaA + level, which characterizes the high creditworthiness of our agricultural holding, was a consequence of our strategy aimed at gradual restructuring and repayment of debt obligations of the past with high discounting, innovation, reduction of unproductive expenses, an ongoing dialogue with investors, which went online during the quarantine period.”