The credit rating of Joint Stock Company Syktyvkar LPK (hereinafter, SLPK, or the Company) is determined by the Company’s strong market position, very strong business profile, high level of corporate governance, medium business size, high profitability, strong liquidity, and the strong assessment of cash flow. The medium leverage and coverage assessments have a constraining effect on the credit rating.
SLPK is one of the leaders of the pulp and paper industry in Russia; it is an enterprise with a full production cycle from the procurement of raw materials to the shipment of finished products. SLPK’s annual capacity is about 1.3 million tons of products. The Company manufactures a wide range of products, including office and professional printing paper, container and consumer cardboard, bleached market pulp, and other products. The Company’s products cover a third of the Russian paper market and are exported to 80 countries worldwide.
KEY ASSESSMENT FACTORS
Strong assessment of the operational risk profile. The Company is a successful player in the highly concentrated pulp and paper products market and a leader in certain segments of the Russian paper market; SLPC accounts for about 13% of the country’s pulp production capacity (second in Russia).
The business profile assessment is determined as very high as per ACRA’s methodology. The Company is one of the world leaders in production costs due to its high technological efficiency and low costs of raw materials. The Agency views the product diversification as high, with the largest product group (white paper) accounting for less than 50% of the Company’s revenue. ACRA estimates that about 77% of revenue comes from high-value-added products. The geographic diversification is assessed by the Agency as low due to the concentration of production on one site.
The high assessment of the Company’s corporate governance is ensured by the very high level of strategic planning and effective risk management system, high assessment of the group structure, as well as adequate management structure and the medium assessment of financial transparency.
Medium business size and high profitability. The weighted average FFO before net interest and taxes for the period from 2025 to 2027 is estimated at RUB 27.4 bln. The Agency estimated the average FFO before interest and taxes margin for 2025–2027 at 29.3%.
Medium leverage and coverage. ACRA expects the ratio of total debt to FFO before net interest to be 2.4x by the end of 2025, and the weighted average ratio of total debt to FFO before net interest from 2025 to 2027 to be 2.1x. The Agency estimates the weighted average ratio of FFO before net interest to interest for 2025–2027 at a level above 2.7x.
Strong liquidity and strong cash flow score. The Company’s financial strategy for the coming years assumes a gradual reduction in the leverage with moderate capital expenses, which explains the high score for of cash flow. Despite the debt repayment peak falling on the beginning of 2026, the Agency estimates the Company’s liquidity as high due to the willingness of the SLPK’s main creditor to refinance existing loan agreements for a ten-year period, if necessary.
KEY ASSUMPTIONS
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Annual average USD/RUB exchange rate within 85.5 to 102.6 in 2025–2026.
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Annual average key rate of the Bank of Russia at 19.2% in 2025, 12.5% in 2026, and 8.0% in 2027.
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Capital investment program in line with the Company’s plans.
possible 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 to interest exceeding 5.0x coupled with the weighted average ratio of total debt to FFO before net interest falling below 2.0x;
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Weighted average ratio of FFO before net interest to interest exceeding 5.0x along with the weighted average FFO before interest and taxes margin consistently exceeding 30%.
A negative rating action may be prompted by:
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Weighted average ratio of total debt to FFO before net interest exceeding 3.5x;
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Weighted average ratio of FFO before net interest to interest falling below 2.5х.
rating components
Standalone creditworthiness assessment (SCA): a+.
Adjustments: none.
issue ratings
There are no outstanding issues.
REGULATORY DISCLOSURE
The credit rating was assigned under the national scale for the Russian Federation based on the Methodology for Credit Ratings Assignment 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.
A credit rating has been assigned to JSC SLPK for the first time. The credit rating of JSC SLPK 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 the data provided by JSC SLPK, information from publicly available sources and ACRA’s own databases. The credit rating is solicited, and JSC SLPK 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 no additional services to JSC SLPK. No conflicts of interest were identified in the course of credit rating assignment.
