Ekosem-Agrar: Company rating lifted to CCC (stable)

Ekosem-Agrar: Company rating lifted to CCC (stable)

24 May 2016 Corporate News

Walldorf, 24 May 2016 – Creditreform Rating has upgraded the company rating of Ekosem-Agrar GmbH, the German holding company of Russian milk producer Ekoniva Group, from D to CCC (stable). While noting that the company remains on a profitable growth course, the analysts also pointed out the risks resulting from its high leverage and its lending to related companies, the latter aspect primarily referring to a loan bearing market-rate interest granted to associated company Ekotechnika Holding GmbH.

Management believes that the upgrade by one rating grade fails to reflect the company’s materially enhanced balance sheet following the 4-year refinancing of the two corporate bonds while at the same time insufficiently recognising the improvement in the Russian country risk in light of the more stable political environment and the encouraging economic indicators (oil price, currency). As the group continues its growth strategy on the operational level, its daily milk output reached the 650 ton mark two days ago. On the crop producing side of the business, copious rainfalls in spring in the Chernozem region suggest that this year will see a high-yield harvest.

Ekosem-Agrar will publish its preliminary figures for the first quarter of 2016 in early June, followed by the presentation of its audited 2015 consolidated financial statements in the second half of June.