Fitch Ratings has affirmed National Joint-Stock Company Naftogaz of Ukraine's Long-Term Foreign-Currency Issuer Default Rating (IDR) at 'B' with the positive outlook.

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"In line with Fitch's Government-Related Entities (GRE) Rating Criteria, Naftogaz's ratings are equalized with those of Ukraine (B/Positive), reflecting the company's strong links with the sovereign and our assessment of the company's standalone credit profile (SCP) at 'b-'," Fitch Ratings said in a statement on its website on April 2.

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"The SCP of Naftogaz reflects the transformation of its business profile, after the unbundling of its gas transmission business, to primarily a natural gas-producing and -wholesale supply company. It also captures likely deterioration of its financial profile due to expected volatility in operations after the unbundling, expected 2020 earnings decrease due to significantly weaker gas prices, uncertainty over domestic price regulation and macro-economic challenges as a result of the COVID-19 pandemic. However, we also expect leverage to remain low but weak, albeit, manageable liquidity," it said.

As UNIAN reported earlier, Fitch Ratings in March 2019 affirmed Naftogaz's Long-Term Foreign- and Local-Currency Issuer Default Ratings at 'B-' with the stable outlook.

UNIAN memo. NJSC Naftogaz of Ukraine is the largest state-run vertically integrated oil and gas holding whose subsidiaries account for about 90% of oil and gas production in Ukraine. Naftogaz develops oil and gas fields, produces crude oil and natural gas. Its core business is also transportation and trade in fuel through its own network of filling stations.