Moody’s Investors Service has upgraded SIBUR’s corporate family rating (CFR) and probability of default rating (PDR) to Ba1 from Ba2 with stable outlook.
In its press release, Moody’s says the upgrade was driven by SIBUR’s strong credit metrics following the change in the ownership, and the agency’s understanding that the new shareholders have endorsed and will support the company’s strategy and conservative financial policies. The rating action was also due to SIBUR’s robust historical financial performance through the cycle, which demonstrated the company’s resilience to downturns.
According to Moody’s, SIBUR has demonstrated high profitability through the cycle, above that of many of its European peers. This is underpinned by SIBUR’s competitive cost position, which is driven by the company’s access to low-cost APG and competitively priced liquid hydrocarbon feedstock in Western Siberia, and diversification into selling natural gas, LPG, naphtha and other related products and fuel additives.
The rating agency expects that the company will sustain its low cost position and continue to demonstrate strong financial metrics in the next 12–18 months, in line with its stated financial policy, despite challenging global economic conditions and SIBUR’s substantial ongoing capital expenditures.
Moody’s expects that the launch of Tobolsk-Polymer plant in H12013, one of the company’s major investment projects, will improve its vertical integration, underlying profitability and cash flow generation.