KSG Agro has been renewed its national scale rating of uaA+ (the Agency’s international scale rating of BOV) by Expert Rating Agency, the press service of the agroholding said.
“Rating Committee of RA Expert-Rating, despite the large-scale aggression of Russia and the difficult situation in the Ukrainian agro sector, has renewed long-term credit rating of KSG Agro on the national scale at the level uaA+. This means that the borrower or a separate debt instrument with a uaA rating is characterized by high creditworthiness compared to other Ukrainian borrowers or debt instruments”, – reported in the agricultural holding and added that the credit rating was assigned based on the analysis of data from the consolidated statements of KSG Agro for the first quarter of 2023.
Experts of the rating agency indicated that the predominant share in the structure of long-term liabilities of KSG Agro as of March 31, 2023 was occupied by long-term loans, the volume of which in the analyzed period decreased by 7.59% to $24 million. At the same time, the volume of short-term loans received by KSG Agro from March 31, 2022 to March 31, 2023 decreased by 21.97% and amounted to $2.67 million.
Sales volumes of the holding company’s products in the analyzed period increased significantly: income from sales for the first quarter of 2023 compared to the first quarter of 2022 increased by 44.52% and amounted to $5.12 million, which is explained by the increase in exports of grain crops in the current year.
Analysis of KSG Agro’s consolidated financial statements by the agency’s experts showed that EBITDA for the first quarter of 2023 compared to the first quarter of 2022 increased by 22.90% to $1.87 mln, and the ratio between EBITDA for the first quarter of 2023 and loans as of March 31, 2023 increased by 1.72 p.p. to 7.08% compared to last year’s figure.
There has been no fighting in the immediate vicinity of Agroholding’s assets since the start of the Russian invasion. Also, they have not suffered from flooding as a result of Russia’s undermining of the Kakhovskaya HPP 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 to produce feed instead of buying it, reducing the holding’s dependence on external suppliers of feed ingredients during the war, analysts said.
“The company has successfully completed the spring sowing campaign and KSG Agro’s management does not expect significant disruptions in its production cycle or a meaningful negative impact of the Russian invasion on business operations in the near future. The Agency notes the increase in sales volumes and efficiency indicators of the holding, as well as the growth of EBITDA/loans ratio”, – summarized RA Expert Rating.
Vertically integrated holding KSG Agro is engaged in pig breeding, as well as in the production, storage, processing and sale of grain and oilseeds. Its land bank is about 21,000 hectares in Dnipropetrovsk and Kherson regions.
According to the agroholding, it is among the top 5 pork producers in Ukraine.
Last year KSG Agro ended 2022 with a net loss of $1.68m compared to $17.71m net profit in 2021 due to the full-scale war launched by Russia, its EBITDA decreased 5.5 times to $1.79m and revenue decreased 47.3% to $16.2m.
