The credit rating of Tatneftekhim LLC (hereinafter, Tatneftekhim or the Company) continues to reflect the medium assessments of the operational risk profile, profitability, interest payment coverage, liquidity, and free cash flow (FCF). The rating is constrained by the low assessment of the industry risk profile due to the high volatility of the sector, as well as the below-medium size of business.
Tatneftekhim produces diesel fuel and some types of gasoline using its own production infrastructure and carries out wholesale deliveries of fuels and lubricants (F&L), gases and other types of fuel. The Company owns property for storage and transshipment of oil and oil products, and also has transport assets, which allows it to provide a wide range of services and ensures greater flexibility in pricing.
KEY ASSESSMENT FACTORS
The medium business profile assessment is based is on the relatively high barriers to entry into the oil refining segment and the moderate cyclicality of the key sales market, and also reflects the presence of Tatneftekhim’s own production. The share of fuel produced at the Company’s facilities continues to increase —it exceeded 57% by the end of 2024. The Agency notes the Company’s diversified client base and generally acceptable credit quality of counterparties. Based on the settlement structure, Tatneftekhim actively uses short-term loans to finance working capital. The corporate governance assessment is medium.
In 2024, the Company’s revenues increased by 50% year-on-year (to RUB 10 bln) thanks to growth of sales in physical terms, including its own products, as well as the price factor. The outpacing growth of expenses in terms of payroll led to a reduction in the Company’s FFO margin before net interest payments and taxes last year, but profitability remains at a medium level.
Low leverage and medium interest payment coverage. As of June 30, 2025, the Company’s total debt was RUB 1.8 bln, 30% of which was issued bonds and 70% was revolving credit lines. The loan portfolio has increased in recent years along with growth of the Company’s business, and leverage ratios remain low. The ratio of long-term debt to FFO before fixed payments was 1.36x in 2024. The ratio of short-term debt to revenues for the past year does not exceed 0.1x. At the same time, on the backdrop of the Bank of Russia increasing its key rate, the ratio of FFO before net interest payments to interest payments deteriorated in 2024 compared to 2023 (2.3x and 3.1x, respectively), although the assessment remains medium.
Medium assessments of liquidity and FCF. The negative cash flow from operations (CFO) and increased interest payments had a restraining effect on FCF in 2024. However, the Agency expects the weighted average FCF margin for 2022–2027 to average 0.4%. The Company’s average liquidity assessment is affected by fairly high debt obligations due in 2025–2026, which are offset by both own sources and available credit limits.
Key assumptions
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The Company developing in accordance with its strategy;
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Further development of the Company’s own production assets;
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Access to external liquidity sources;
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No dividend payments in the forecast period.
Potential outlook or rating change factors
The Stable outlook assumes that the rating will highly likely stay unchanged within the 12 to 18-month horizon.
A positive rating action may be prompted by:
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Weighted average ratio of FFO before net interest payments to interest payments exceeding 5.0x;
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Weighted average FFO margin before net interest payments and taxes exceeding 10% coupled with the weighted average FCF margin growing above 2%.
A negative rating action may be prompted by:
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Ratio of long-term debt to weighted average FFO before fixed payments exceeding 2.0x;
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Ratio of short-term debt to weighted average revenues exceeding 0.2x;
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Weighted average FFO margin before net interest payments and taxes falling below 5%;
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Weighted average FCF margin falling below 0%.
Rating components
Standalone creditworthiness assessment (SCA): bb+.
Adjustments: none.
Issue ratings
No outstanding issues have been rated.
REGULATORY DISCLOSURE
The credit rating has been assigned to Tatneftekhim LLC under the national scale for the Russian Federation based on the Methodology for Assigning Credit Ratings to Non-Financial Corporations under the National Scale for the Russian Federation and the Key Concepts Used by the Analytical Credit Rating Agency within the Scope of Its Rating Activities.
The credit rating of Tatneftekhim LLC was published by ACRA for the first time on June 21, 2021. The credit rating and its outlook are expected to be revised within one year following the publication date of this press release.
The credit rating was assigned based on data provided by Tatneftekhim LLC, information from publicly available sources, and ACRA’s own databases. The credit rating is solicited and Tatneftekhim LLC participated in its assignment.
In assigning the credit rating, ACRA used only information, the quality and reliability of which were, in ACRA’s opinion, appropriate and sufficient to apply the methodologies.
ACRA provided additional services to Tatneftekhim LLC. No conflicts of interest were discovered in the course of credit rating assignment.
