Outlook on Ashinsky Metal Works Revised to Negative
OREANDA-NEWS. National Rating Agency has affirmed its national scale 'A-' credit rating on Ashinsky Metal Works OJSC (AMW). The outlook on the rating is negative. On Feb. 21, 2014, AMW was assigned NRA's credit rating of 'BBB+', which was raised to 'A-' on Mar. 10, 2015. NRA intends to revise the rating score within three months after the outlook assignment or as a response to ruble devaluation.
The negative outlook reflects the materialization of currency risk, previously identified by NRA among key rating factors. The euro's strong appreciation against the ruble over the past few months has strongly affected the company's debt service coverage ratio and debt size in ruble terms, weighing on its financial strength and profitability metrics. AMW's forex-denominated revenue is insufficient to cover its current forex-denominated liabilities.
The rating affirmation reflects the company's improving operational performance (full-year 2014 IFRS revenue increase by 20%, gross profit increase by 177% and operating profit reaching RUB898.4 million compared with the previous year's loss). Russian GAAP financials for 1H 2015 confirm the operational performance favourable trends. The rating also recognizes the company's long-term debt maturity profile.