Press Releases / 03.04.2012

Press Release as of 03.04.2012

"NPO "Mostovik"

CJSC AK&M Rating Agency assigned the A+ credit rating with a stable outlook as per the national scale NPO Mostovik LLC (Research and Production Association Mostovik LLC, hereinafter referred to as the Company).

The company's revenue for 2010 amounted to RUB 24,904 million, revenue for 9 months 2011 reached RUB 18 ,940 million, pre-tax profit for the same periods totaled RUB 597 million and RUB 273 million, respectively. According to preliminary statements, the company's revenue for 2011 exceeded RUB 30 billion, with works and services for a total of about RUB 70 billion planned for 2012.
Operating margin of NPO Mostovik LLC is. Sales margin as of 09/30/2011 was 8.8%, return on assets was 3.0%. These figures are above the average for the construction industry (6.6% and 2.4%, respectively).
Principal risk factors are as follows: considerable and growing debt burden, poor liquidity, general industry-specific economic and production risks.
The debt burden grew considerably last year: over 2011, the Company's debt increased twice, revenue approximately 1.3-fold. The debt to revenue ratio as of the end of the year was approximately 44%, against 27% at the start of 2011. Total amount of the Company's debt liabilities as of the end of 2011 was about RUB 14 billion, 96% of that amount being long-term liabilities.
Liquidity of NPO Mostovik LLC is fairly low: absolute liquidity ratio of the Company as of 09/30/2011 was 0.05, current liquidity ratio was 1.15.
Asset turnover, capital turnover, accounts payable and receivable turnover is satisfactory. The accounts payable and receivable turnover ratios are close to 2, the asset turnover ratio is about 1.
The Company's debt burden, liquidity and turnover ratios are under the influence of the general risks specific for the industry: seasonality of operations, technical complexity of the projects, long performance / contractor settlement periods.
NPO Mostovik LLC is a large Russian construction and development company. It is a member of industry-specific SROs and licensed for construction operations.

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This press release is based on the statement of assigning a credit quality rating to Research and Production Association Mostovik LLC.
The rating score, 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 the Ministry 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 entities 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, for listing bonds and for providing access to the MICEX+ trading mode). 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.

ul. Gubkina 3
Moscow, Russia
Press release by: A.M. Krachkovskaya
Phone no. (495) 916-70-30, fax no.: (499) 132-69-18.