Novorossiysk Commercial Sea Port Group (NCSP) reports that Standard & Poor’s (S&P) and Moody’s rating agencies updated credit opinions on NCSP Group maintaining the current ratings of the Group at «BB-» and «Ba3» respectively with «Stable» outlooks.
Standard & Poor’s report dated 8 May 2014 notes the following:
«The stable outlook on OJSC Novorossiysk Commercial Sea Port (NCSP) reflects Standard & Poor's Ratings Services' expectation that NCSP will continue to cautiously control its capex and preserve cash. We also believe that the group will be able to continue to raise tariffs moderately, which will help it to preserve an EBITDA margin of about 55% despite slightly lower cargo volumes».
«The "satisfactory" business risk profile score reflects our assessment of NCSP's competitive position as "satisfactory", based on its position as the largest port operator in Russia and the third largest in Europe. The group also has good product diversity and a stable customer base. Going forward, in our view, NCSP will further benefit from the deregulation of tariffs which could help to partly offset volume drops as NCSP remains highly exposed to raw materials volatility, and could also help to stabilize operational performance», also said S&P in the report.
Moody’s credit opinion dated 30 April 2014 also says that:
«The Ba3 CFR is driven by NCSP's solid position of Russia's largest and diversified sea port operator, including its role of an important route for Russian oil exports. The rating factors in NCSP's positive free cash flow, a degree of the group's capex flexibility and NCSP's strong relationship with state-owned banks, in particular the continued support from Sberbank, the group's largest creditor».
PJSC NCSP CEO Yuriy Matvienko commented on these events:
«Our mid-term operational and financial plans were adequately reflected in the rating analysis. Softening the terms of the $1.95 billion Sberbank loan, including lower interest and more comfortable covenants, played an important role. Group’s management will continue to focus on improving cash-flow and liquidity management».
NCSP Group is the largest port operator in Russia and the third-largest in Europe, in terms of cargo turnover. NCSP shares are traded on Russia's Moscow Exchange (ticker: NMTP) and on the London Stock Exchange in the form of GDRs (ticker: NCSP). NCSP Group cargo turnover in 2013 totalled 141 million tonnes. Consolidated revenue according to IFRS in 2012 totalled USD 928 million and EBITDA was USD 510 million. NCSP Group consolidates the following companies: PJSC Novorossiysk Commercial Sea Port, LLC Primorsk Trade Port, PJSC Novorossiysk Grain Terminal, OJSC Novorossiysk Ship Repair Yard, OJSC NCSP Fleet, OJSC NLE, OJSC IPP, CJSC Baltic Stevedore Company, and CJSC SFP.