The RA expert confirmed the creditworthiness rating of the non-financial company Atomenergoprom

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AK&M 23 September 2022 18:37

On September 23, 2022, the Expert RA rating agency confirmed the creditworthiness rating of the Atomenergoprom non-financial company at the GIAA level. The rating forecast is stable. This is stated in the agency's message.

The Joint-Stock Company "Atomic Energy Industrial Complex" unites the civil assets of the State Atomic Energy Corporation "Rosatom" related to ensuring the functioning of the nuclear fuel cycle, construction and operation of nuclear power plants, including electricity generation.

As a subsidiary of Rosatom, AEPC is a vertically integrated holding that consolidates all the main elements of the value chain, including uranium mining in Russia and abroad, conversion and enrichment of uranium, fabrication of nuclear fuel, power engineering, engineering and construction of nuclear power plants, electricity generation, as well as back-end (circulation with spent nuclear fuel and radioactive waste, decommissioning of nuclear and radiation hazardous facilities), grouped into separate divisions, which provides a high assessment of the company's market positions. The company is the only vendor in the world that combines the full range of competencies in the field of nuclear technologies, which provides the company with full control over compliance with the conditions of estimates and deadlines for construction and subsequent deliveries of NFC elements, and allows minimizing the risks associated with the activities of external contractors.

On the territory of the Russian Federation, AEPC is a monopolist in the nuclear technology market, being included in the list of Russian legal entities that may own nuclear materials and nuclear installations. The Company operates all 11 nuclear power plants operating in the territory of the Russian Federation with 38 operating power units with a total installed capacity of 30.5 GW. The features of this type of generation, expressed, among other things, in low maneuverability indicators, are reflected in high operational characteristics – due to the small ranges and rates of load changes, nuclear power plants cover the base loads of the power system, which provides the largest number of hours of installed capacity use in the power system, and, as a result, the highest installed capacity coefficient (KIUM). A subsidiary of AEPC, Rosenergoatom Concern JSC, is Russia's largest generating company for electricity generation: by the end of 2021, the company retained its position as a leader in low-carbon electricity generation in Russia, 222.4 billion kWh of electricity was generated at the Russian NPP, which is another historical record for generation. The share in the total volume of electricity generation in the Russian Federation remained at the level of 20%. This indicates the company's low exposure to external shocks and provides fundamental support for the assessment of the company's business risks.

For uranium enrichment services and fuel supplies, the company mainly enters into long-term contracts, in some cases commensurate with the life cycle of the stations (about 60 years). At the end of 2021, the portfolio of foreign orders for a 10-year period at the level of Rosatom State Corporation amounted to $139.9 billion, while the portfolio of projects for the construction of nuclear power plants abroad amounted to 35 power units in 12 countries of the world. The agency notes that a significant part of the portfolio is accounted for by the main contractor of foreign construction, Atomstroyexport, which is not included in the perimeter of AEPC consolidation and is controlled directly by Rosatom State Corporation. One of the company's key goals in the long term is to increase the share of foreign revenue over 50%, which will be largely ensured by the operation of nuclear power plants built on the principles of BOO ("construction-ownership-operation"), in particular in Turkey. In 2021, a nuclear power unit of the highest level of safety was commissioned in the Belarusian NPP, construction of new nuclear power units in China, India and Turkey began. In 2022, amid the aggravation of geopolitical conditions, the contract for the construction of the Hanhikivi nuclear power plant in Finland was unilaterally terminated by the Finnish side. The Agency notes the sufficiency of the group's portfolio of foreign projects among "friendly" countries and assesses the risks from the cancellation of the project for the diversification of foreign business as intangible.

The Corporation continues to expand the diversification of activities, increasing the share of new and non-uranium business in revenue to 30%, from 262 billion rubles in 2020 to 329.6 billion rubles in 2021. Revenue from the sale of new products is 18% more than the target value for 2021 and 26% more than the result of 2020.  The portfolio of orders for new products (outside the nuclear industry) for 10 years amounted to 1.97 trillion rubles, which is 23% higher than the result of 2020 (1.6 trillion rubles). The company is actively developing activities in wind power, nuclear medicine, composite materials, logistics business. In 2019, Atomenergoprom acquired Delo Management Company LLC, thereby expanding logistics for nuclear power plants under construction abroad. In 2020, the portfolio of wind energy projects in the Russian market has been increased in capacity to 1.2 GW or more than 30% of the Russian wind generation market. The company plans to increase the share of related areas to 40% by 2030, which will have a positive impact on the diversification of the business as a whole and will largely minimize the risk from the concentration of the group's activities, which is already estimated at a low level.

According to the consolidated financial statements of JSC Atomenergoprom according to IFRS standards, the company's assets as of 30.06.2022 amounted to 3.95 trillion rubles, capital – 2.6 trillion rubles. Revenue by the end of 2021 amounted to 1 083.5 billion rubles, net profit – 210.6 billion rubles.