FITCH RATINGS HAS AFFIRMED QAZAQGAZ RATING AT BBB- WITH A STABLE OUTLOOK
The international rating agency Fitch Ratings has confirmed the long-term issuer default rating (IDR) of NC "QazaqGaz" JSC at the level of "BBB-", the forecast is stable. A similar rating was assigned to subsidiaries of JSC "Intergas Central Asia" and JSC "KazTransGas Aimak".
As noted in the message, NC "QazaqGaz" JSC is a natural monopoly on transit, transportation and distribution of gas in Kazakhstan. The company is also engaged in the export and production of gas.
The rating of the National Gas Company of Kazakhstan "BBB-" is one step lower than the rating of its ultimate shareholder the state. According to Fitch Ratings, this reflects the relatively strong ties between QazaqGaz and the state. At the same time, the agency continues to assess the creditworthiness of the company on an independent basis at the "BBB-" level, despite the pressure caused by the volatility of oil and gas prices and the expected increase in capital expenditures in the future. These factors may lead to an increase in gross leverage on cash from operating activities (FFO) to a level above 3.0x.
In addition, the long-term default rating of the issuer QazaqGaz is supported by the company's monopoly position in the segment of transmission and distribution of gas within the country, as well as a dominant position in the field of transportation, export and sale of gas.
According to the agency's analysts, the ratings of subsidiaries reflect high legal and operational incentives, as well as high or medium strategic incentives for providing support between JSC "Intergas Central Asia" and JSC "KazTransGas Aimak" with their parent structure NC "QazaqGaz" JSC.
According to Fitch Ratings, the strong ties of NC "QazaqGaz" JSC with the state are further reinforced by the recently assigned status of a national company. This makes it one of the agents for the implementation of policy in the field of development of the fuel and energy complex of the Republic of Kazakhstan.
According to the agency, QazaqGaz expects to improve the profitability of its business in the country in the next 2-3 years.
Fitch Ratings analysts believe that National Comapny QazaqGaz has significant liquidity, since cash and cash equivalents amount to 457 billion tenge as of June 30, 2021. According to the agency, these funds are more than sufficient to cover the debt with short maturities in the amount of 24 billion tenge.
A substantial reserve of funds is expected to be allocated for investments in 2022-2023. Also, NC "QazaqGaz" JSC has a history of good access to Kazakhstani banks, although it does not have long-term confirmed credit lines.
