08.12.2008, 16:09
Moody’s Affirms DTEK’s Rating
OREANDA-NEWS. December 8, 2008. Moody’s Investors Service affirms Corporate Family Rating of DTEK Holdings Limited (DTEK) at 'B2' with ‘stable’ outlook.
Key drivers in determining the rating were an assessment of DTEK's business risk profile, soundness of the market models and regulatory framework in Ukraine, DTEK's financial stability and expected development of credit metrics.
As stated in Moody’s report DTEK achieved significant growth during 2007 and 2008, reflected in a 77% growth in sales. As the rising prices in the coal and electricity generation markets represented the main drivers of this growth, profitability remained solid, resulting in strong cash flow generation. The company's financial performance was further supported by its conservative M&A strategy, focused on fortification of a local presence in the eastern part of Ukraine, with limited international expansion plans. The strong financial performance, improving corporate governance and successful capex strategy enabled the company to improve its funding structure by raising new long-term unsecured loans from international banks, replacing short-term secured loans from local banks.
Moody’s expects “that DTEK will maintain its strong position as an efficient, vertically integrated energy and fuel company, supported by continuously improving operating efficiency measures”.
Yuriy Ryzhenkov, CFO of DTEK, commented: “The fact that Moody’s Investors Service affirms DTEK's Corporate Family Rating at 'B2' with ‘stable’ outlook, especially in the present conditions of global financial crisis, once again confirms DTEK’s solid financial position and a good quality of corporate governance. Balanced loan portfolio and low level of Net Debt to EBITDA ratio let us look into the future with confidence. Management efforts to reduce risks of negative impact of financial crisis on the company give their results. Now we can say that we manage the crisis, not the crisis manages us”.
Key drivers in determining the rating were an assessment of DTEK's business risk profile, soundness of the market models and regulatory framework in Ukraine, DTEK's financial stability and expected development of credit metrics.
As stated in Moody’s report DTEK achieved significant growth during 2007 and 2008, reflected in a 77% growth in sales. As the rising prices in the coal and electricity generation markets represented the main drivers of this growth, profitability remained solid, resulting in strong cash flow generation. The company's financial performance was further supported by its conservative M&A strategy, focused on fortification of a local presence in the eastern part of Ukraine, with limited international expansion plans. The strong financial performance, improving corporate governance and successful capex strategy enabled the company to improve its funding structure by raising new long-term unsecured loans from international banks, replacing short-term secured loans from local banks.
Moody’s expects “that DTEK will maintain its strong position as an efficient, vertically integrated energy and fuel company, supported by continuously improving operating efficiency measures”.
Yuriy Ryzhenkov, CFO of DTEK, commented: “The fact that Moody’s Investors Service affirms DTEK's Corporate Family Rating at 'B2' with ‘stable’ outlook, especially in the present conditions of global financial crisis, once again confirms DTEK’s solid financial position and a good quality of corporate governance. Balanced loan portfolio and low level of Net Debt to EBITDA ratio let us look into the future with confidence. Management efforts to reduce risks of negative impact of financial crisis on the company give their results. Now we can say that we manage the crisis, not the crisis manages us”.
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