EMEA corporate ratings resistant to sanctions against Russia

EMEA corporate ratings resistant to sanctions against Russia

Baku, Azerbaijan, March 31

By Emin Aliyev - Trend:

The vast majority of non-Russian EMEA corporate ratings would be unaffected by sanctions against Russia, Fitch Ratings reported on March 31.

"We believe most companies would find ways to mitigate even the worse-case scenario of a complete halt in their Russian sales and cash flows should the Ukraine crisis result in wide-ranging measures," according to the statement. "They could, for instance, cut dividends and capex, forgo M&A or conserve cash."

Less severe effects, such as higher funding and energy costs, could be weathered in the short-term. However, pressure on credit metrics would rise if political tension persists.

The Fitch-rated non-Russian issuers most at risk are Carlsberg Breweries, Atrium European Real Estate, Metro AG and Uranium One, Fitch said.

"Most vulnerable are the handful of corporates that generate a significant proportion of their revenue or operating profit in Russia," according to the statement. "Carlsberg (BBB/Stable) generates around 20% of its revenue in Russia. Should Carlsberg permanently lose its Russian unit, which we understand is effectively debt-free, gross FFO leverage would increase by up to 1.5x. The overall profile would also deteriorate due to lower diversification and fewer resources for growth, potentially leading to a one-notch downgrade."

The contribution to Carlsberg's consolidated cash flow from Russian operations is also substantial (we estimate it at more than 30% in 2013), although the loss would be partly mitigated by the increasing importance of Asia and the resilience of profits in Western Europe. In a less severe scenario, where the government weakened management's ability to control strategy, Carlsberg could find it harder to tackle the many challenges in the Russian beer sector. We take comfort from its track record of adjusting to adversities in the country and a step-up in these challenges should be manageable at the current rating.

It should be stressed that Carlsberg Group also includes Baltika Brewing Company, having a subsidiary in Azerbaijan since 2009, Baltika-Baku brewery.

Atrium's (BBB-/Stable) exposure to Russia represents 28% of net rental income and 19% of its total asset portfolio by value, but only seven out of 153 properties, according to the statement.

Nonetheless given its low leverage, a downgrade would be unlikely even in an extreme scenario. We believe Atrium's balance sheet management factors in the inherent level of risk in the region, Fitch reported.

Metro's (BBB-/Stable) revenue exposure to Russia is estimated at below 7%, Fitch reported.

"Stripping out Russian operating profits, and assuming Metro would not pay its Russian leases under this scenario, we estimate FFO net leverage could rise by 0.3x-0.4x to around 4.7x," according to the statement. "This is still below our guideline for BBB- of below 5x. If the planned IPO of 25% of Metro Cash and Carry (MCC) Russia were cancelled, leverage would probably only rise 0.1x-0.2x, as the reduction in debt would be partially offset by the loss of EBITDA on any disposal. It would however slow MCC's expansion as the proceeds are earmarked for re-investment in fast-growing countries."

Uranium One (BB-/Stable) generates roughly 40% of its revenue in Russia through off-take agreements with its ultimate parent, state-owned Rosatom, to supply up to 51% of its marketable production at spot prices, Fitch reported.

"This includes up to 100% of attributable production from its Kazakhstan mines," according to the statement. "Losing the Russian cash flows would be detrimental, especially with uranium prices near multi-year lows. However, this is not our base-case scenario as the strong political commitment to peaceful nuclear cooperation between Russia and Kazakhstan implicitly covers Uranium One's Kazakh operations."

Qatar reports 645 new COVID-19 cases, 208,877 in total
Qatar reports 645 new COVID-19 cases, 208,877 in total
Egypt will bring a royal mummy to Expo 2020 in Dubai
Egypt will bring a royal mummy to Expo 2020 in Dubai
Activities of trade markets between Iran, Pakistan to contribute to trade –Deputy Minister
Activities of trade markets between Iran, Pakistan to contribute to trade –Deputy Minister
Loading Bars
SpaceX’s Starship prototype lands successfully during trials in Texas
WHO, Germany launch new global hub for pandemic, epidemic intelligence
38 illegal immigrants rescued off SE Tunisia
5.1-magnitude quake hits Southwest Indian Ridge
Israel reports 73 new COVID-19 cases, 838,761 in total
WHO records over 721,000 new daily cases of COVID-19 worldwide
EU medicine regulator starts rolling review of Sinovac COVID-19 vaccine
Qatar reports 645 new COVID-19 cases, 208,877 in total
Central Bank of Iran shares data on impact of oil exports on economic performance
UK records another 2,144 coronavirus cases, 27 deaths
Turkish president, German chancellor discuss bilateral ties, regional issues
OSCE Minsk Group Co-Chairs welcome release of Armenian detainees
Ombudsman prepares report on hate crimes, hostile approach towards Azerbaijanis
Egypt will bring a royal mummy to Expo 2020 in Dubai
Uzbekistan’s 1Q2021 vegetable production revealed
Uzbekistan notes threefold increase in balance of mortgage loans repayment
Georgia sees increase in imports of buckwheat in 1Q2021
Review of regulations to improve Iran home appliances production - official
President Sadyr Zhaparov signs decree on Cabinet of Ministers of Kyrgyzstan
Austria interested in participating in projects in Turkmenistan
Azerbaijani, Georgian peoples live in peace and friendship - PM
Azerbaijan approves renewed make-up of joint commissions with several countries
Azerbaijan to hold webinar on "New Opportunities for Startup"
Azerbaijan discloses data on construction work carried out by private enterprises in Baku
Russian, Turkish presidents discuss issues related to Karabakh
Iran’s Bahar Azadi gold coin price falls
Azerbaijani Finance Ministry places medium-term bonds on auction
Iran's Energy Exchange announces products to be on sale on May 8
Azerbaijan has very responsible approach to ensuring cybersecurity - Kaspersky Lab
Georgian organic farm begins production of sunflower oil
Iran approves projects on establishment of trade zones
Azerbaijani minister names amount of government spending to restore Karabakh in 2021
Canada reveals volume of bilateral trade with Georgia
Georgian Minister of Agriculture talks success of German businesses
Hungarian airline Wizz Air to resume flights from Georgia's Kutaisi International Airport
European Parliament acting unfairly by calling Armenian terrorists "POWs" - MP
Eurostat names amount of petroleum oils imports by EU countries from Turkmenistan
Activities of trade markets between Iran, Pakistan to contribute to trade –Deputy Minister
Kazakhstan investing in Georgian ports, specifically in Batumi oil terminal
Georgia expects increase in low-cost airlines during summer season
Georgia NCC and NATO-EU Information Center to implement joint projects
Iraq commits to return Iran's debts
US welcomes Azerbaijan’s release of three Armenian detainees
Iran's TEDPIX index sees gains
Volume of raw silk cocoon to be produced in Iran revealed
Shameful monument to fascist Nzhdeh in Karabakh must be demolished - Russian media outlet
Shekel weakens after Yellen rate remarks
Flydubai expands network to over 80 destinations, resumes flights to Russia and Iran
Azerbaijan wraps up investigation on Lebanese mercenary who fought in Karabakh on Armenian side
Blue Origin to begin space tourism ticket sales Wednesday
Navoi Mining and Metallurgical Combine leads among Uzbekistan’s taxpayers
Meeting between Azerbaijani, Georgian foreign ministers being held
Azerbaijan shares data on number of vaccinated citizens for May 5
Relations between peoples of Azerbaijan, Georgia based on long history - President Aliyev
Azerbaijan confirms 1,080 more COVID-19 cases, 2,074 recoveries
Georgian, Azerbaijani people are interlinked, interdependent on each other - Georgian PM
UAE to launch flights to Uzbekistan’s Tashkent
Austrian chancellor urges European drug regulator to fast-track Sputnik V’s registration
Azerbaijan continues to be one of biggest investors in Georgia’s economy - President Aliyev
Georgia's prime minister visits grave of Azerbaijan's National Leader Heydar Aliyev (PHOTO)
Azerbaijani IT company to locally launch smartphone app for accepting non-cash payments
Iran's NISOC ready to increase oil extraction
Silk production campaign underway in Turkmenistan’s Dashoguz region
Azerbaijan's PulPal payment system to add cryptocurrency wallet
Geostat unveils statistics on Georgia's oil imports
Azerbaijan reveals funds to be allocated for student tuition
Uzbekistan, S. Korea preparing for buyout of state share of mining and processing JV
Uzbekistan’s textile export to grow in 2021 - German expert
IMF predicts higher oil prices and better COVID-19 response for Iran by second half of 2021
Georgian parliament adopts new law regarding National Bank of Georgia
Georgia to face double-digit inflation if lari continues to plunge in value - TBC-Bank
Turkey reveals 4M2021 data on chemicals exports
Germany, France, Spain reach general agreement over fighter jet
Average monthly salary in Baku down
Turkey's export value of clothes up in 4M2021
Significant amount of funds to be invested in Georgian Poti port dev't - Deputy minister
Russia reports nearly 8,000 daily COVID-19 cases
Electra Consumer Products signs Yeinot Bitan acquisition deal
SOCAR Turkey subsidiaries awarded zero waste certificates
Increasing manufacturing of household appliances in Iran can guarantee exports - ICCIMA
Cost of chargeable services rendered to Baku's population in 1Q2021 dips
Georgia sees increase in potato imports
Georgian PM invites Azerbaijani president to Georgia
1Q2021 turnover of catering sector in Baku disclosed
Baku Stock Exchange holds auction on placement of CBA's short-term notes
Georgia reveals prices of fuel for May 4
Iran hopes Gorgan-Aktau flight to boost its tourism industry
Azerbaijani payment system offers B2B and C2B services in domestic market
Saudi Arabia considers barring overseas haj pilgrims for second year
Khazar Consortium in Turkmenistan opens tender to purchase of hygienic products
SOCAR Turkey’s petrochemical unit increases recycling by over 30%
Details of Iran’s face mask trade disclosed
Iran reveals COVID-19 data for May 5
Uzbekistan, Turkmenistan, Iran talk pilot train transportation
Most transactions on government securities in Azerbaijan fall on primary market
Azerbaijan, Turkey, Uzbekistan plan to ink MoU on audit sphere
Czech sees opportunities for co-op with Uzbekistan in industry and agriculture – Ministry
Turkmen Health Ministry extends tender for medical supplies purchase
Iran sees reduction in reliance on oil exports - Iranian president
Iran's Golestan Province to work on more agricultural projects
All news