Fitch Ratings has revised the Outlook on Russia-based Agribusiness Holding Miratorg LLC's (Miratorg) Long-Term Issuer Default Rating (IDR) to Positive from Stable and affirmed the IDR at 'B', the rating agency informed.
The revision of the Outlook to Positive reflects Fitch's expectation that Miratorg's free cash flow (FCF) generation will be positive and strong from 2015, leading to significant deleveraging over the next three years.
The Positive Outlook also reflects Fitch's view of reduced cash support from Miratorg for the unconsolidated poultry and beef projects, as they become operational in 2014 and no longer require substantial capex. Fitch expects Miratorg will continue to grow and achieve EBITDAR of around USD600m by 2015 which, together with greater product diversity and improving credit metrics, will be more commensurate with a higher rating. In addition the Positive Outlook reflects Fitch's expectation that the company will successfully refinance its short-term debt maturing in 2014.
Agroindustrial holding Miratorg was established 1995. Its enterprises ensure integrated production from field to counter in 15 regions of Russia.
IFRS net profit of Miratorg for 2013 decreased by 14.1% to RUB 9.6 billion from RUB 11.2 billion in 2012. Revenue increased by 11.5% to RUB 53.7 billion. sales of food products increased by 18.6% to 434 thousand tonnes. EBITDA edged up to RUB 15.3 billion against RUB 15.2 billion in 2012. EBITDA margin was 28.45% in 2013 against 31.55% the year before.