Beynəlxalq reytinq agentliyi “Moody's” Azərbaycan Dövlət Neft Şirkətinin (SOCAR) reytinqi üzrə proqnozu "sabit"dən "müsbət"ə dəyişdirərək, korporativ reytinqini “Ba1”, defolt mümkünlüyü reytinqini (PDR) “Ba1-PD” və əsas kredit qiymətləndirməsini (BCA) “ba2” səviyyəsində təsdiqləyib.

Marja.az xəbər verir ki, bu barədə “Moody's” agentliyi məlumat yayıb.

"Reytinq üzrə proqnozun "sabit"dən "müsbət"ə dəyişdirilməsi 5 iyul 2024-cü il tarixli Azərbaycan hökumətinin reytinqinin Ba1 səviyyəsində təsdiqlənməsi və proqnozun "sabit"dən "müsbət"ə dəyişdirilməsi barədə qərarımızdan sonra həyata keçirilir",- məlumatda bildirilir.

Qeyd edilib ki, bugünkü reytinq hərəkəti suveren reytinqə uyğundur və SOCAR-ın dövlətlə güclü kredit əlaqələrini, eləcə də Azərbaycanın əməliyyat və makroiqtisadi mühitinə əhəmiyyətli dərəcədə məruz qalmasını, həmçinin neft və qaz bazarının davamlı mühiti şəraitində şirkətin sağlam maliyyə və kredit göstəricilərini əks etdirir:

"Suveren reytinq üzrə "müsbət" proqnoz kredit göstəricilərinin güclənməsinə səbəb olan yaxşılaşmış iqtisadi perspektivləri əks etdirir. Orta Dəhlizin artan nüfuzu Azərbaycanın Avrasiya nəqliyyat mərkəzi olmaq ambisiyasını daha da gücləndirir. Avropa İttifaqının Azərbaycan qazına olan tələbatının artması, eləcə də bərpa olunan layihələrin genişləndirilməsi neft ehtiyatlarının tükənməsinin şaxələndirilməsini sürətləndirir. Eyni zamanda, makroiqtisadi sabitliyin və fiskal intizamın qorunub saxlanması daha çox inam yaradır".

XXX

Moody's Ratings changes SOCAR's outlook to positive, affirms ratings

DIFC - Dubai, July 09, 2024 -- Moody's Ratings (Moody's) has today changed to positive from stable the outlook of State Oil Company of the Azerbaijan Republic (SOCAR), and affirmed SOCAR's Ba1 corporate family rating (CFR), Ba1-PD probability of default rating (PDR) and ba2 Baseline Credit Assessment (BCA).

The rating action follows our decision on 5 July 2024 to affirm the Ba1 rating of the Government of Azerbaijan and change the outlook to positive from stable. For further information on the sovereign rating action, please refer to the press release: https://ratings.moodys.com/ratings-news/424437.

RATINGS RATIONALE

Today's rating action is in line with the sovereign rating action and reflects SOCAR's strong credit linkages with the state as well as its significant exposure to Azerbaijan's operating and macroeconomic environment. The rating action also reflects the company's sound financial performance and credit metrics amid resilient oil and gas market environment; strategic importance for the government of Azerbaijan; and a track record of more discipline in strategic and shareholder decisions, investment spending and shareholder distributions which translate into positive cash generation and solid liquidity.

The positive outlook on the sovereign rating reflects improved economic prospects that have led to a strengthening in credit metrics. Rising prominence of the Middle Corridor further bolsters Azerbaijan's ambition to be a Eurasian transport hub. Greater EU demand for Azeri gas as well as a widening pipeline of renewable projects accelerates diversification from depleting oil resources. At the same time, a lengthening track record of maintaining macroeconomic stability and fiscal discipline confers greater credibility to institutional effectiveness, as proven from resilience in the credit through recent shocks.

As a result, operating and macroeconomic environment for SOCAR has improved and the government's financial capacity to support the company, if needed, has strengthened, which is credit positive for the company.

Given that SOCAR is 100% state owned, we apply our Government-Related Issuers (GRI) methodology to determine the company's CFR. SOCAR's Ba1 CFR incorporates (1) the company's BCA of ba2; (2) the Ba1 foreign currency issuer rating of the Government of Azerbaijan, with a positive outlook; (3) the very high default dependence between the state and the company; and (4) the high probability of the government providing support to the company in the event of financial distress.

While SOCAR's financial performance weakened in 2023, compared with a record high in 2022, as the average brent crude oil price declined to $83 per barrel from $101 per barrel over this period, it still remains sound. The company's Moody's-adjusted EBITDA margin was 9.1% in 2023, compared with 11.8% in 2023, 8.7% in 2022 and 6.2% in 2020. SOCAR also generated positive free cash flow (FCF) for the third year in a row thanks to solid operating cash flow, moderate capital spending and modest shareholder distributions. We expect the company's profitability and cash generation to remain relative stable in 2024-25.

The rating action also reflects SOCAR's strong credit metrics. Its gross leverage increased to 2.4x in 2023 from 1.5x in 2022 but was well below the 3.4x in 2021 and 5.2x average in 2018-20, and is likely to remain around the current level over the next two years. Moody's-adjusted EBIT/Interest expense was 2.9x in 2023, compared with 7.6x in 2022 and 2.3x average in 2018-21, and will remain stable in 2024-25. Finally, RCF/Net debt declined to 49% in 2023 from 118% a year earlier but was above the 31% average in 2018-21.

The company's liquidity is healthy. Its cash balance of AZN8.6 billion as of year-end 2023 and forecasted cash generation of around AZN2.0 billion over 2024-25 should be sufficient to cover estimated debt maturities of AZN9.3 billion over this period.

In addition, SOCAR's credit quality reflects its (1) key role in the oil and gas sector of Azerbaijan and its importance to the national economy; (2) sustainable hydrocarbon production volumes in 2021-23, although some declines were registered in the first half of 2024; (3) close links with the Azerbaijan government, which has accumulated substantial reserves and should be in a position to provide financial support to the company if needed; and (4) more discipline in strategic and financial management of the company, which was demonstrated by the state recently.

However, the company's rating also takes into account its (1) sizeable trading operations which reduce its consolidated margins, inflate leverage through the use of short-term debt and limit predictability of financial results because of the inherent volatility of these activities; (2) governance considerations, including its complex organisational structure, limited transparency and disclosure, and concentrated ownership which may lead to rapid changes in its strategy and financial profile; and (3) high operational concentration in Azerbaijan.

ESG CONSIDERATIONS

In addition to governance factors mentioned above, SOCAR has very high exposure to environmental factors related to carbon transition risk as decarbonisation efforts and the transition towards cleaner energy continues.

The company also has high exposure to social factors, mainly driven by demographic & societal pressures and the push for responsible production, which are common for oil and gas companies.

Overall, ESG considerations do not have material impact on the current credit rating. The company's environmental, social and governance risks are mitigated by the high probability of government support in the event of financial distress.

RATIONALE FOR THE POSITIVE OUTLOOK

The positive outlook on SOCAR's rating is in line with the positive outlook on Azerbaijan's sovereign rating and reflects its strong positioning within its current rating category, with a potential for an upgrade if we were to upgrade Azerbaijan's sovereign rating, provided there is no material deterioration in the company's specific credit factors, including its operating and financial performance, market position, credit metrics and liquidity, and no weakening in the probability of extraordinary state support in the event of financial distress.

FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS

We could upgrade SOCAR's rating if we were to upgrade Azerbaijan's sovereign rating, provided there was no significant deterioration in the company's specific credit factors, including its operating and financial performance, market position, credit metrics and liquidity, and no weakening in the probability of extraordinary state support in the event of financial distress.

We could downgrade SOCAR's rating if (1) we were to downgrade Azerbaijan's sovereign rating; or (2) there was evidence that the government's capacity and willingness to provide support to SOCAR was diminishing; or (3) the company's BCA is downgraded. SOCAR's BCA could come under pressure if (1) the government's actions significantly impaired its standalone credit profile (including unfavourable regulatory or tax changes, significant equity withdrawals, or increased exposure to large state-initiated investment projects without funding support); or (2) its operating and financial performance deteriorated materially; or (3) its liquidity weakened significantly. Numerically, the BCA could be downgraded if the company's retained cash flow (RCF)/net debt declined below 20% and EBIT/interest expense below 4.0x, both on a Moody's-adjusted and sustained basis.

The methodologies used in these ratings were Integrated Oil and Gas published in September 2022 and available at https://ratings.moodys.com/rmc-documents/393389, and Government-Related Issuers methodology published in January 2024 and available at https://ratings.moodys.com/rmc-documents/406502. Alternatively, please see the Rating Methodologies page on https://ratings.moodys.com  for a copy of these methodologies.

CORPORATE PROFILE

State Oil Company of the Azerbaijan Republic (SOCAR) is a 100% state-owned, vertically integrated national oil and gas company headquartered in Baku, Azerbaijan. The company has a monopoly position in supplying oil and gas products to the domestic market and is the state's official representative in all oil and gas projects in Azerbaijan, including all international consortia. SOCAR has an integrated offering including crude oil and petroleum products, natural gas, refining products, oilfield services, and sales and distribution (including trading). Apart from Azerbaijan, the company mainly operates in Switzerland, Turkiye, the UAE and Georgia. In 2023, SOCAR reported revenue of AZN85 billion ($50 billion).

.