S&P affirmed DeloPorts rating at B+ based on the results of 2020 with stable outlook
On April 15, 2021, the rating Agency Standard & Poor’s (S&P) confirmed the long-term rating of DeloPorts (a stevedore asset of Delo Group) at B + level with a Stable forecast at the end of 2020, the company says in a press release.
Despite the pandemic, due to an increase in grain and container handling, the results of DeloPorts in the past year were better than expected. One of the factors that contributed to this was the launch of deep-water berth No. 38 in 2019.
According to S&P estimates, the EBITDA growth of DeloPorts was 46%, the ratio of funds from operating activities (FFO) to debt showed 26% versus 20% in the baseline scenario of the rating agency.
At the same time, the “Stable” forecast given by the agency implies that DeloPorts has the potential and prerequisites to maintain the weighted average FFO / debt ratio at the level of 25% -30% in the next three years. As noted by S&P, it was also influenced by the development strategy adopted by Delo Group, which does not imply the acquisition of new assets using borrowed funds in the next two years but plans to invest in organic growth.
The same forecast considers potential positive processes in the Russian economy in 2021 and their impact on the activities of the stevedore asset.
The agency assessed the liquidity of DeloPorts as adequate, noted the company's ability to manage it having access to bank financing and capital markets.
S&P predicts an increase in container turnover in 2021–2022 by 8–12% per year, grain turnover by 5–7%, adjusted EBITDA margin at 78% –80% as the next baseline scenario for DeloPorts soon.
Commenting on the agency's research and conclusions, Igor Yakovenko, Chief Executive Officer of DeloPorts, said: “We see that the implemented investment projects, for example, deep-water container berth No. 38, have a significant positive impact on the operating activities of our assets and on the image of the Company. In summer we plan to launch a deep-water grain berth No. 40A. I am sure that the subsequent effect will be reflected in the next study of the rating agency and in the overall rating of DeloPorts”.
DeloPorts is a holding company that owns and operates stevedore assets of Delo Group in the port of Novorossiysk. DeloPorts consolidates NUTEP Container Terminal, KSK Grain Terminal and Delo Service Company.
Delo Group is the largest transport and logistics holding in Russia, managing sea container terminals in the Azov-Black Sea, Baltic and Far Eastern basins, a network of railway container terminals, a fleet of containers and fitting platforms. The parent company of the Group is LLC MC Delo, 70% owned by the founder of the Group, Sergey Shishkarev, and 30% is owned by State Atomic Energy Corporation Rosatom.
The Group's stevedoring business includes DeloPorts holding and Global Ports, a leading container terminal operator. The transport and logistics business of the Group is made up of the multimodal transport operator Ruscon and the intermodal container operator TransContainer that owns and operates the largest fleet of containers and flatcars over the entire 1520 standard railway network.