Russian Cosmetics And Personal-Care Products Producer Concern Kalina (JSC) Upgraded To 'ruA+'
April 17, 2008 Сbonds
MOSCOW (Standard & Poor's) April 17, 2008--Standard & Poor's Ratings Services said today that it raised its Russia national scale rating on Concern Kalina (JSC), Russia's largest cosmetics and personal-care products producer, to 'ruA+' from 'ruA-'.
"The upgrade reflects Kalina's favorable operating performance trend and our expectations that the company will retain relatively low leverage, despite possible external growth," said Standard & Poor's credit analyst Anton Geyze.
Kalina has been able to grow its operations and maintain strong market shares in its key segments of Russia's competitive cosmetics and personal-care products market. In addition, despite strong growth and higher working capital, Kalina has managed to preserve moderate exposure to financial risk.
Kalina's marginally positive free operating cash flow easily enters negative territory when market growth requires bigger working-capital outlays, as happened in 2007.
This puts additional pressure on the company's financial profile. However, we expect Kalina's continuing profitable growth to result in better working-capital management and, consequently, positive free operating cash flows.
"We expect the company to maintain current levels of short-term funding access on the strength of its moderate leverage levels and growing cash flows from operations," said Mr. Geyze.
Company — Kalina
Full nameopen joint stock company Kalina
IndustryChemical and petrochemical industry