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Press Releases / 16.05.2013
Press Release as of 16.05.2013 "NPO "Mostovik" CJSC AK&M Rating Agency affirmed the ‘A+’ credit rating (stable outlook) assigned to NPO Mostovik LLC (Research and Production Association Mostovik LLC) as per the national scale. The ‘A+’ rating indicates that the Company maintains a high level of reliability. Risk of a delay in meeting liabilities is insignificant. We appreciate the growing assets and equity, increasing revenues and profits, higher return on sales and recent liquidity improvements as the rating drivers for NPO Mostovik LLC. In 2012, NPO Mostovik LLC increased its assets and equity capital benefiting from its growth and business expansion. In 2012, the Company’s assets increased by 47.9% to RUB 59.8 billion, equity capital by 18.6% to RUB 3.8 billion. Another argument for the credit rating of NPO Mostovik LLC is its growing sales revenue in 2012 (by almost 6% to RUB 32.6 billion). The Company’s higher profit performance in 2012 is pleasing the eye. Gross profit of NPO Mostovik LLC for 2012 increased by 57.5%, sales profit by 75.6%, balance sheet profit by 24.1%, net profit by 22.6%. Accordingly, GP amounted to RUB 5.8 billion, sales profit totaled RUB 4.6 billion, balance sheet profit exceeded RUB 1 billion, while net profit reached RUB 745 million. In recent years, NPO Mostovik is consistently improving its return on sales ratios. In 2012, return on sales (EBITDA margin) increased from 86.1% to 87.8%, while net profit margin grew from 1.97% to 2.28%. The recent liquidity growth we noted in 2012 may be regarded as a positive trend in the development of NPO Mostovik LLC. Current liquidity ratio increased by 1.2%, acid test ratio by 53.6%, absolute liquidity ratio by 55.5%. At the same time, the high and still growing debt burden, weaker turnover ratios for capital and receivables are exerting pressure on the Company’s credit rating. The Company is facing a heavy and growing debt burden. In 2012, loan debt of NPO Mostovik LLC increased by 84.2% to almost RUB 25.7 billion, resulting in poorer debt/revenue, equity to total assets, financial stability ratios. Another negative signal is the weaker capital turnover ratio and receivables turnover ratio. In 2012, general capital turnover ratio of NPO Mostovik LLC decreased from 0.95 to 0.65, equity capital turnover ratio from 10.65 to 9.34, receivables turnover ratio from 2.14 to 2.01. It will be noted that the Company’s debt liabilities soared with assets, equity capital, revenues and profits on the rise. Besides, NPO Mostovik LLC expanded its portfolio of orders and successfully negotiated the refinancing of its current liabilities with the lending banks, a large part of its 2013 maturities rescheduled for 2014-2015. Therefore, the debt burden growth risks may be regarded as largely offset by the positive development of NPO Mostovik LLC, a strong reason for affirming the credit rating previously assigned to the Company. NPO Mostovik LLC is a large-scale Russian building and civil engineering company specializing in the construction of bridges, elevated roadways, various tunnels, railway lines and other components of underground railway systems. As of today, NPO Mostovik LLC has designed and constructed more than 600 facilities for transport, special, civil and industrial purposes in Russia and abroad. Among others, the Company provides services to government bodies, municipal authorities and public utilities of Russia’s federal subjects (including Moscow and St. Petersburg), large enterprises in various sectors (OJSC Mosmetrostroy, Olympstroy State Corporation, OJSC Russian Railways, Omsk and Chelyabinsk underground railway systems, etc.). The company has a vast experience in the construction sector: Olympic facilities in Sochi, the Russky Bridge in Vladivostok, the Zhivopisny Bridge spanning the Moskva River in Serebryany Bor (Moscow), the Moscow Metro Butovskaya Line, the Omsk metro system, the tunnel sections of the international Russia-Turkey gas pipeline are some of its largest projects. At the end of 2012, assets of NPO Mostovik LLC amounted to RUB 59.8 billion, equity capital was RUB 3.8 billion.2
Short name: NPO Mostovik. This press release is based on the statement of assigning a credit rating to NPO Mostovik LLC. The credit rating, along with any information and conclusions provided in this press release, only conveys our opinion on the Company’s credit standing 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 – Regulation 323-P), Vnesheconombank (for granting subordinated loans) and SME Bank (for its program of lending to SME businesses), RUSNANO (when selecting banks to provide cash and settlement 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). By a resolution of Russia’s GovernmentAK&M Ratings count for the recapitalization of banks. Besides, AK&M Rating Agency is recognized by AHML and accredited by SRO National Securities Market Association. CJSC AK&M Rating Agency |
