Press Releases / 31.08.2012

Press Release as of 31.08.2012

JSC "KuibyshevAzot"

CJSC AK&M Rating Agency monitored Open Joint Stock Company KuibyshevAzot and upgraded its credit rating as per the national scale from ‘A+’ to ‘A++’ with a stable outlook.

The ‘A++’ rating indicates that OJSC KuibyshevAzot is qualified as a highly reliable borrower, with the lowest risk of a delay in meeting liabilities imaginable.

The previous credit rating ‘A+’ as per the national scale (stable outlook) was assigned to OJSC KuibyshevAzot on February 14, 2012.

Upgrading the rating, we appreciate the improving performance of OJSC KuibyshevAzot and the impressive key economic performance indicators the Company has achieved.

The rating of OJSC KuibyshevAzot is essentially supported by the wonderful growth rates of its sales revenue and GP. The company’s sales revenue is steadily on the rise. In the first and second quarter 2012, the Company earned by 8% (on average) more than in Q1 and Q2 of 2011. The gross profit is also growing at a pace to be envied. In Q1 and Q2 2012, GP was above last year’s results by 7% on average. In 2012, OJSC KuibyshevAzot achieved the highest half-year GP and sales revenue results in five (previous) years.

OJSC KuibyshevAzot is still increasing its financial capacity benefiting from the high profitability level. In particular, retained earnings of OJSC KuibyshevAzot at the end of the first half year 2012 amounted to RUB 16.4 billion (the highest result in five years), over 60% of its total balance.

The upward trend in the amount of assets of OJSC KuibyshevAzot has been in force for the last three years. At the end of H1 2012, the Company’s assets rose by 33.8% year-on-year. As of July 1, 2012, assets of OJSC KuibyshevAzot were estimated at almost RUB 27.2 billion increasing by almost 1% year-to-date.

Equity capital of OJSC KuibyshevAzot is also growing. In H1 2012 alone, the Company’s equity capital rose by more than 12%.

While assets, equity capital, profitability and financial capacity of OJSC KuibyshevAzot follow the general growth trend, its loan debt is looking down. In the half year 2012, the Company’s long-term debt decreased by 8.5%, short term debt more than 4 times.

OJSC KuibyshevAzot is a major Russian chemical enterprise specializing in the production of ammonia, nitrogen fertilizers, caprolactam and caprolactam-based deeper conversion products. KuibyshevAzot exports more than half of its goods. The Company’s assets as of the end of the first half year 2012 as per RAS amounted to RUB 27.2 billion, sales revenue as of the end of H1 2012 totaled RUB 15.6 billion.

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This press release summarizes the financial and economic performance of OJSC KuibyshevAzot monitored at the end of the first half year 2012.

The credit rating, along with any information and conclusions provided in this press release, only conveys our opinion on the Company's reliability and shall not be considered as advice on the purchase and sale of securities or the provision of loan facilities.

AK&M Rating Agency will not incur any responsibility for any interpretations, inferences and consequences related to the application of results of the rating estimation procedure by any third parties.

AK&M Rating Agency is a leading independent national rating agency engaged in rating activities since 1993. AK&M Rating Agency is accredited by theMinistry of Finance of the Russian Federation (order no. 452 as of September 17, 2010).

AK&M Ratings are recognized by the Central Bank of Russia (for providing unsecured lending facilities – Provision 323-P), Vnesheconombank (for granting subordinated loans) and SME Bank (for its program of lending to SME businesses), RUSNANO (when selecting banks to provide business banking services to project and engineering companies implementing investment projects), the MICEX (as a prerequisite for including bonds in the Corporate Bond Index / MICEX CBI and Municipal Bond Index / MICEX MBI calculation base and for listing bonds). Pursuant to an order of Russia's Government AK&M Ratings count for approving the capitalization increase procedure for banks. Besides, AK&M Rating Agency is recognized by AHML and accredited by SRO National Securities Market Association.

CJSC Analysis, Consulting and Marketing Rating Agency
ul. Gubkina 3
Moscow, Russia
Press release by: A.G. Chumachenko
Phone no. (495) 916-70-30, fax no.: (499) 132-69-18.