OREANDA-NEWS. National Rating Agency has withdrawn its credit rating on GAZ OJSC due to expiry of the contract. The company has been assigned an exit rating of 'A'.

According to the Group's IFRS financials, its consolidated revenue for 2014 totaled RUB120 billion, down 16% on 2013. The decrease was due to the contraction of the Russian commercial vehicle market (from 15 to 30% in different market segments). This was partially offset by the Group's growing export sales (+56%) and the rising revenue of the Ural Automobile Plant (+17%), supported by renovation of the Ural family vehicles and reorganization of the sales system. GAZ's EBITDA fell to RUB9.6 billion in 2014, and EBITDA margin was at 8%.

In addition to the market contraction, the Group was affected by adverse macroeconomic factors, such as the cost of funding, which increased considerably after the hike in the Central Bank's key rate, and the ruble devaluation, which pushed up the cost of imported components and production equipment. Due to these pressures, the Group posted a RUB2.1 billion loss for 2014.

At the same time, we note that in 2014 the GAZ management adopted a strategy aiming to mitigate the impact of external shocks on the Group. The cumulative effect of a cost reduction programme allowed GAZ to improve its financial performance, as is evident from the 1Q 2015 financials (the EBITDA improved, and the net loss went down). In addition, the Group is taking steps to renegotiate its borrowing agreements, including interest rates. According to the management, GAZ's debt portfolio restructuring is to be completed before the end of 2015. Taking into account the Group's anti-crisis efforts (such as the debt portfolio restructuring, cost cuts and business process streamlining) , NRA believes that GAZ will be able to properly performs its current contractual obligations over the forecast horizon.

NRA's analytical products, including ratings and the contents of this press release, are statements of NRA's independent opinion as of the date they are expressed and not statements of fact or recommendations to make any investment decisions or conduct any stock market transactions. NRA is not responsible for any results obtained from the use of opinions and/or information contained in this press release.

While NRA has obtained information from sources it believes to be reliable, NRA does not guarantee that this information is perfectly correct, complete and accurate, as it does not perform an audit or undertake any duty of due diligence or independent verification of any information it receives.