KSG Agro Holding has been upgraded to uaA+ rating by the rating agency Expert Rating
Despite the large-scale aggression of the Russian Federation and the difficult situation in the Ukrainian agricultural sector, KSG Agro Holding has been upgraded to uaA+ national scale rating (BBB international scale rating) by the Expert Rating Agency (http://www.expert-rating.com/rus/rating-list_individualnye_reitingi_promyshlennye_kompanii_ksg_agro_s.a._ponovleno_reiting_ksg_agro_s.a./). This was reported by the press service of the agricultural holding.
Despite the large-scale aggression of the Russian Federation and the difficult situation in the Ukrainian agricultural sector, the Rating Committee of RA "Expert-Rating" has renewed the long-term credit rating of KSG Agro on the national scale at uaA+ (rating on the international scale of the Agency at BBB) (http://www.expert-rating.com/rus/rating-list_individualnye_reitingi_promyshlennye_kompanii_ksg_agro_s.a._ponovleno_reiting_ksg_agro_s.a./). This means that a borrower or a debt instrument with uaA rating is characterized by high creditworthiness compared to other Ukrainian borrowers or debt instruments. The agency assigned the credit rating based on the analysis of KSG Agro's consolidated financial statements for the first quarter of 2023.
Expert Rating analysts note that the predominant share in the structure of KSG Agro's long-term liabilities as of 31.03.2023 was occupied by long-term loans, the volume of which decreased by 7.59% to $24 million in the analyzed period. At the same time, the volume of short-term loans received by KSG Agro from 03/31/2022 to 03/31/2023 decreased by 21.97% to $2.67 million.
Sales volumes of the holding's products increased significantly in the analyzed period: sales revenue for the first quarter of 2023 increased by 44.52% compared to the first quarter of 2022 and amounted to $5.12 mln. This significant growth was due to an increase in grain exports in the first quarter of 2023. The significant increase in KSG Agro's sales volumes was reflected in the corresponding profitability indicators.
The analysis of KSG Agro's consolidated financial statements by the agency's experts showed that EBITDA in the first quarter of 2023 compared to the first quarter of 2022 increased by 22.90% to $1.87 million, and the ratio between EBITDA for the first quarter of 2023 and the volume of loans as of 31.03.2023 increased by 1.72 p.p. to 7.08% compared to the previous year, which is positively assessed by the agency.
The agency notes that since the beginning of the Russian invasion, there have been no hostilities in the immediate vicinity of the Agroholding's assets. Also, they were not affected by the floods caused by the Russian Federation's blowing up of the Kakhovka hydroelectric power plant dam and have alternative sources of water supply. As in the previous year, in the first quarter of 2023, KSG Agro used more of its own grain for feed production instead of purchasing it, which reduced the holding's dependence on external suppliers of feed ingredients during the war.
"The company has successfully completed the spring sowing campaign and KSG Agro's management does not expect any significant disruptions in its production cycle and a significant negative impact of the Russian invasion on its business activities in the near future. The agency notes the increase in sales volumes and performance indicators of the holding, as well as the growth of the ratio between EBITDA and loans," stated in the report of RA "Expert Rating".
