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The rating of DTEK assigned by Fitch has stood market fluctuations
01 August, 2008
Kiev, 01 August, 2008. – Fitch Ratings global rating agency has kept the international long-term rating of DTEK Holdings Limited (DTEK) at the level of ‘B+’, the international short-term rating at the level of ‘B’ and the national long-term rating at the level of ‘АА-’.
The rating was assigned to the Company in the autumn of 2007. The agency points out that the financial activity of DTEK meets the expectations of Fitch Ratings. In the period from 2006 to 2007, capital expenditures increased by 86.8% (a growth of UAH 451 million to UAH 971 million). In the 2007 financial year, the operating margin grew to 26.7% (compared to 23.8% in the 2006 financial year).
The rating outlook remains ‘stable’. Fitch expects that in the 2008 financial year, DTEK will raise new loans that will be used to refinance the existing short-term loans. This will enable the Company to ensure its stable gross leverage. However, according to the analysts of the Agency, complications with the liberalization of the power sector in Ukraine can restrain the expansion of DTEK and slow down the growth of the Company’s credit portfolio.
In June 2008, Fitch Ratings assigned a ‘AA-’ rating under national scoring to the internal bonds of DTEK. According to the Agency’s review, ‘despite high expectations for recovery, Ukraine’s country cap of ‘RR4’ limits DTEK’s recovery rating to that level’.
‘For us, it is very important that in spite of the complicated financial situation in Ukraine and changes occurring in the national power sector, the leading international analysts consider DTEK as a stable company and think highly of our potential’, noted the Chief Financial Officer of DTEK, Yuriy Ryzhenkov.
Reference
Donbass Fuel-Energy Company (DTEK) is the first private vertically integrated energy company of Ukraine. It is a part of the financial and industrial group System Capital Management (SCM). The enterprises of DTEK build up an efficient operational chain from coal production (Pavlogradugol OJSC, Komsomolets Donbassa Mine OJSC) and enrichment (five enrichment plants), to electricity generation (Vostokenergo Ltd.) and distribution (Service-Invest Ltd., PES-Energougol OJSC).
DTEK is the leader in the fuel-energy industry in Ukraine. According to 2007 results, the Company’s market share in the Ukrainian coal mining industry was 20.9%; its share in thermal generation was 27.0% and 5.4% in electricity distribution.
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