BAKU, Azerbaijan, September 19. Moody’s Ratings has affirmed Kazatomprom JSC’s (KAP) long-term issuer rating at Baa1 and upgraded its Baseline Credit Assessment (BCA) to baa2 from baa3.
This was announced in a report published by the Moody’s Ratings.
According to the agency report, the outlook remains stable.
Moody’s said the upgrade reflects Kazatomprom’s sustained strong operating and financial performance, high profitability, robust liquidity and conservative financial policies.
"The upgrade of KAP's BCA reflects the continuing track record of the company's strong operating and financial performance, high profitability, robust liquidity and adherence to conservative financial policies," Moody’s said.
The agency also highlighted KAP’s strong credit metrics, liquidity and net cash position, which have been maintained throughout the uranium price cycle.
According to Moody’s, the assessment is supported by Kazatomprom’s low-cost position based on in-situ leaching recovery (ISR) technology, its leading share of around 20% of global uranium production and one of the largest uranium reserve bases globally.
Moody’s also cited the company’s long-term contracts with customers and geographical diversification of sales.
At the same time, the agency pointed to KAP’s limited business diversification, with more than 90% of revenue derived from uranium and uranium products, geographical concentration of assets in Kazakhstan, exposure to uranium price volatility and risks inherent to the uranium extraction process.
The assessment also takes into account high capital spending and sizeable dividend payouts under the company’s dividend policy.
"KAP's stable outlook is in line with outlooks of the Government of Kazakhstan and Samruk-Kazyna," Moody’s said.
According to Trend analysis, the assessment is in line with a broader trend of international rating agencies maintaining or improving their assessments of major Kazakh companies in recent months. S&P Global Ratings has upgraded the ratings of KazMunayGas (KMG), Tengizchevroil (TCO), QazaqGaz and several financial institutions following its revision of Kazakhstan’s sovereign rating.
Fitch Ratings recently affirmed Kazatomprom’s Long-Term Issuer Default Rating at BBB with a Stable Outlook.
The trend also extends to Kazakhstan’s sovereign credit profile. The Eurasian Development Bank (EDB) said successful implementation of planned reforms could improve the country’s sovereign credit profile and increase its chances of reaching the A rating category.
"Successful implementation of the planned reforms increases Kazakhstan’s chances of obtaining a sovereign rating in the ‘A’ category. S&P’s upgrade to ‘BBB’ was another step in this direction. Kazakhstan’s current sovereign ratings are ‘Baa1’ from Moody’s and ‘BBB’ from Fitch and S&P," the bank said.
