Moscow, 25 June 2020. SIBUR Holding, Russia’s largest integrated petrochemicals company, announces that Fitch and Moody's rating agencies have affirmed its long-term issuer default ratings at investment grade BBB- and Baa3, with a stable outlook. This decision means that the Company now enjoys investment grade credit ratings from all three key rating agencies.
In its rating action commentary, Fitch notes that a stable outlook for the Company reflects the higher utilisation rate at its recently built ZapSibNeftekhim plant, a fall in 2020–2021 CAPEX due to completion of large expansionary investments, and overall economic recovery after the downturn caused by the coronavirus pandemic. The agency’s expectation is that in 2020 a slump in demand for SIBUR’s key products (polypropylene and polyethylene), will be not as heavy as the global GDP decline, and over a longer horizon, demand for these products will keep growing above the global GDP growth rate.
Moody's expects SIBUR to be in a sufficiently strong position going forward thanks to its business resilience, an accumulated liquidity cushion, and successful completion of the active investment phase early in 2020, which will help drive its EBITDA growth. The agency also notes the successful launch of the ZapSibNeftekhim facility that will boost sales of high value-added products.
Alexander Petrov, member of the Management Board and Managing Director for Economics and Finance at SIBUR, commented:
“We have consistently focused on transforming SIBUR into a highly resilient business prepared to navigate the uncertainty in global markets. The polymer capacities of our recently completed ZapSibNeftekhim project already contribute to EBITDA generation and help us to offset negative effects thanks to higher internal consumption of gas processing products and increased polymer output. In extreme economic conditions, our team has acted promptly to respond to external challenges. Maintaining the utilisation rate at all key production facilities by flexibly redirecting output to alternative markets, achieving significant cost optimisation, and increasing liquidity reserves have been the key measures in this highly volatile period. Our affirmed investment-grade ratings reflect the fundamental resilience of SIBUR's business and our commitment to stringent financial discipline.”