OREANDA-NEWS. On 27 March 2008 international rating agency Standard & Poor’s (S&P) announced, it had upgraded rating outlook of Rostelecom, Russia’s national LD operator, from stable to positive. Rostelecom’s long-term credit rating was confirmed at BB-.

As S&P said in its press release, the decision to revise the rating outlook was driven by Rostelecom’s improving financial flexibility which, as the agency’s professionals believe, allows the LD operator to bolster its market positions and improve its operating indicators. Based on S&P estimates, the company’s current financial standing is marked by low leverage, high liquidity, positive free cash flows from operations and limited capital outlays. The company’s financial standing will further improve after funds are received from the sale of an interest in Golden Telecom.

In its press release, S&P gave a positive assessment of positive actions taken by  management to improve efficiency and cut costs, and also possible prospects for the company to strengthen its market positions through intensive promotion on the market of unregulated telecommunications services that is designed to offset a reduction in Rostelecom’s revenue from traditional LD services amid rising competition.

The positive outlook means the likelihood that S&P could lift Rostelecom’s long-term credit rating if the company succeeds in retaining its leadership positions on the DLD/ILD market, enhancing sales diversification and improving margins, and also if it keeps leverage in check and creditworthiness at a high level.