Fitch Ratings has affirmed National Joint Stock Company Naftogaz's (Naftogaz) Long-Term Foreign-Currency Issuer Default Rating (IDR) at 'B' with a positive outlook.
The rating is upheld since September 2019 and is equalised with the sovereign rating of Ukraine (B/Positive), as the company has strong linkage with sovereign. In its statement Fitch discusses a number of drivers, including strategic importance of Naftogaz, expected profitability, FX risks, gas transit business unbundling, regulatory risks and focus on domestic market.
Meanwhile, in the end of March, the Cabinet of Ministers of Ukraine supported the decision of Naftogaz's Supervisory Board to extend the contract with Andriy Kobolyev as the group's CEO. The contract has been prolonged by four years till March 2024.
The government named the following operating priorities for Mr. Kobolyev: maintain solid cash generating ability of Naftogaz, decrease Ukraine’s reliance on imported gas through gas production and energy efficiency, as well as expand the group’s proved and probable reserves. The government also named the preparation of Naftogaz to a potential public listing in the medium term among Mr. Kobolyev’s priorities during his renewed tenure.
Naftogaz is sticking to its operating efficiency priorities: lower operating expenditures, capital discipline and transformation activities. The group prepares for a gas market liberalization expected to start on 1 May 2020 when temporary regulated terms set by the government expire.
NJSC Naftogaz of Ukraine