The credit rating of STROYDORSERVICE LLC (hereinafter, the Company) stems from the strong business profile due to the relative simplicity of the projects being implemented and the Company’s successful experience in performing similar contract work, an extremely stable contract base that ensures capacity utilization for three years in advance, as well as low leverage and good coverage. The Company’s geographic diversification is medium. At the same time, according to ACRA’s methodology, the Company’s market position is assessed as low on a federal scale. The Agency notes that the Company maintains a strong level of liquidity and has a sufficient production base to implement contracts for the construction and maintenance of motor roads. The Company’s main customers are mainly federal and regional government agencies. A relatively small size, medium profitability, low assessment of corporate governance, including financial transparency (including lack of IFRS reporting), as well as the industry the Company belongs to have a constraining effect on its credit rating: infrastructure construction is characterized by increased risks, although, in ACRA’s opinion, road construction is one of the least risky segments of this industry.
STROYDORSERVICE LLC is engaged in the maintenance, construction, reconstruction, repair and overhaul of highways and roadside infrastructure. The main areas of the Company’s operations are the Khabarovsk Krai, the Primorsky Krai, and the Jewish Autonomous Region.
KEY ASSESSMENT FACTORS
High assessment of the business profile and medium geographic diversification. The Company operates in three regions of the Far East, fulfilling government contracts for the construction and maintenance of paved roads, which, in the Agency’s opinion, is one of the most typical and least risky activities in the infrastructure construction industry. The portfolio of contracts ensures almost 100% utilization of the Company’s capacities for the next three years, which leads to the high assessment of the quality of the contract base. The Company’s dependence on subcontractors is low — by the end of 2024, the share of subcontracting in the revenue structure was 23.1%, and it is projected to grow to 34%. The Company also owns five asphalt plants and has extensive experience in implementing contracts on four federal highways, as well as on regional, inter-municipal and municipal motorways. The Company also has its own sources of crushed stone and crushed stone mixtures, including three licensed quarries. The Company possesses all road construction machines as necessary for road maintenance and construction.
Low assessment of corporate governance, including financial transparency. The corporate strategy is conservative; it includes contracts and work in the regions of the Company’s presence and relies on government programs for the development of the transport industry. The strategy has not been formalized. The Company’s general risk management policy is aimed at minimizing potential negative impacts on its financial results. The risk management system is also not formalized. The Company does not have a board of directors. The Company’s shareholder is deeply involved in its activities. The group structure is simple, but there are loans and guarantees issued for other shareholder companies. The Company prepares reports only according to RAS.
Low score for the Company’s size; medium profitability. According to ACRA’s estimates, the Company’s FFO before net interest and taxes for 2024 amounted to RUB 1.2 bln, which corresponds to the low score for the size of business as per ACRA’s criteria. The Company’s profitability (FFO before interest and taxes margin) was 11% at the end of 2024 (9% a year earlier). ACRA expects that the weighted average indicator for 2025–2027 will be about 10%.
Low leverage and good coverage. By the end of 2024, the Company’s total debt, including rentals, amounted to about RUB 1 bln. Generally, settlements with the Company are made in the fourth quarter of each calendar year. Therefore, the Company borrows during a year and makes repayments at the year-end, which in the short term increased the debt burden. The debt raised in 2024 was repaid in January 2025 upon the closure of the work and receipt of revenue from the contracts. As a result, there was a slight increase in the leverage by the end of 2024: the ratio of total debt to FFO before net interest increased from 0.3x in 2023 to 0.9x; the ratio of total debt to equity also declined slightly (from 0.4x to 0.5x). ACRA does not expect the Company’s leverage to exceed 1.0x in the forecast period up to 2027. Borrowings include bank loans, loans from related parties, and lease obligations.
In late 2024, the ratio of FFO before net interest to interest was 11.4x (in 2022 and 2023 it also exceeded 10x). The weighted average indicator for 2025–2027 is expected to be above 10x.
Strong liquidity and cash flow. As of September 1.2025, the Company had RUB 306.3 mln in free credit limits and RUB 689.1 mln in cash held in bank accounts. At the end of 2024, the free cash flow (FCF) calculated as per ACRA’s methodology was negative, since contract payments were received only in January 2025 (in 2022 and 2023, similar indicators were in the positive area). In the forecast period from 2025 to 2027, the FCF is expected to be positive.
KEY ASSUMPTIONS
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Completion of all concluded contracts and maintaining the size of the contract portfolio at least at the current level in 2025–2027.
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Prime costs growth rate not exceeding the revenue growth rate.
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Dividend payments not higher than projected by the Company.
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Timely fulfillment of all concluded contracts.
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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Better market position;
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Better score for corporate governance;
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FFO before net interest and taxes exceeding RUB 5 bln;
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FFO before net interest and taxes margin exceeding 12%.
A negative rating action may be prompted by:
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Leverage exceeding 2.0x along with coverage declining below 8.0x;
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Higher volume of related-party transactions;
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Much worse access to external sources of liquidity.
RATING COMPONENTS
SCA: bbb+.
Support: none.
ISSUE RATINGS
There are no outstanding issues.
Regulatory disclosure
The credit rating has been assigned 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 economic development of the regions of presence of the rated entity was determined based on the principles of the Methodology for Assigning Credit Ratings to Regions and Municipal Entities of the Russian Federation.
The credit rating has been assigned to STROYDORSERVICE LLC for the first time. The credit rating of STROYDORSERVICE LLC 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 STROYDORSERVICE LLC, information from publicly available sources, and ACRA’s own databases. The credit rating is solicited and STROYDORSERVICE 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 no additional services to STROYDORSERVICE LLC. No conflicts of interest were discovered in the course of credit rating assignment.
