The rating agency RAEX (Expert RА) has confirmed the credit rating of Transneft at the ruAAA level, with a stable forecast.
The agency still estimates Transneft’s business portfolio as very strong. Pipeline transportation ensures relatively low crude oil and petroleum products transportation costs, compared to railway transportation, thus providing the Company with an exceptionally strong competitive advantage, whereas a multi-branch pipeline network allows to pump products both westwards and eastwards, reducing the Company’s dependency on the demand dynamics in any given region.
The Company’s projected liquidity is still estimated by the agency as strong, while the debt level is considered low. The debt/EBITDA indicator is not expected to grow more than two times, as was the case before.
The agency points out that the currency risks that are present due to the debt being in foreign currency in spite of mainly rouble revenues, are minimised to a large extent through the policy of timely accumulation of foreign currency on bank accounts; the risk keeps going down as the share of rouble financing is being ramped up in the portfolio. For example, the share of foreign currency debt in the structure of financing dropped from 85% as of 31.12.2015 to 48% as of 31.12.2017.