OREANDA-NEWS. "National Rating Agency" confirmed the credit rating of IDGC of Centre at the "AA" level on the national scale.

The Company holds a dominant position in the market, the share of IDGC of Centre for electricity transmission in the service area, according to the Company, is more than 80% in monetary terms. Also, from February 1, 2013 IDGC of Centre took over the functions of an electricity supplier of last resort in the Bryansk, Orel and Kursk regions, and from May 1, 2013 in the Tver region, and from October 1, 2013 in the Smolensk region. Term of performance of the functions of the supplier of last resort is provided until approval of a supplier of last resort following the results of a tender of the Ministry of Energy of the Russian Federation, but not for more than 12 months.

The volume of the Company’s electricity transmission services demonstrates stable growth, resulting in a positive trend in the Company’s revenues during the analyzed period (2009 - 1st half of 2013). IDGC of Centre’s revenue under IFRS for 6 months of 2013 amounted to 41.9 billion rubles, having increased by 23% compared with the same period last year. Despite the growth in the revenue, EBITDA of the Company decreased by 35% in the 1st half of 2013 compared with the 1st half of 2012 and amounted to about 6 billion rubles. The Company’s profit decline was due to the creation of a substantial provision for impairment of receivables.

Total assets of IDGC of Centre on the balance sheet as of 30.06.2013 amounted to 90.1 billion rubles, with equity of 42.5 billion rubles. The total debt of the Company as of 30.06.2013 was equal to 27.3 billion rubles, and the net debt was 25.9 billion rubles. Creditors of the Company are the leading Russian banks, in addition, in October 2012 IDGC of Centre successfully placed bonds worth 4 billion rubles. The Company’s debt is estimated as fair: the net debt/EBITDA reduced to one year is about 2.3.

Financial ratios, defining liquidity position and financial stability of the Company, are traditionally high enough. Good financial results from year to year allow IDGC of Centre to pay dividends and increase the level of the Company’s equity from retained earnings. The equity-assets ratio as of 31.12.2012 was 0.5, which is a high level of security of the Company’s own funds. IFRS financials for 2012 and the 1st half of 2013 as a whole allow to assess creditworthiness and stability of the Company at a very high level.

As negative points in the last press release the Agency noted the presence of a substantial amount of outstanding receivables. In the first half of 2013 the Company created significant reserves for impairment of receivables (4 billion rubles under IFRS), which, in the opinion of the management, should fully cover possible losses. Despite the considerable provisioning, the financial result of IDGC of Centre remained positive - net profit for 6 months of 2013 amounted to 603 million rubles.

"The confirmation of the Company’s rating is due to the leading positions in the market, the presence of a parent shareholder in the face of the state and generally good financial results according to IFRS. High level of own funds, the financial stability and liquidity, as well as the conservative amount of the Company’s debt allows highly evaluate the creditworthiness and stability of IDGC of Centre. Over the past few years the Company shows predominantly positive development, improving its operations, perfecting its governance structure and business planning.

As negative factors a significant decline in profitability of the Company in the 1st half of 2013 due to accrual of provision for impairment of receivables should be noted," comments Natalia Soboleva, a senior analyst of the National Rating Agency. The Auditor of the financial statements under IFRS is CJSC KPMG.