The credit rating outlook of JSC “ZASLON” (hereinafter, the Company) has been changed due to the Agency’s expectations for an increase in the FCF margin, as well as an improvement in the coverage assessment following an increase in operational cash flow in 2026. The Company’s credit rating is determined by the below-medium size of the business, medium leverage, and medium operational profile assessment. ACRA also notes high profitability, strong liquidity, and strong cash flow assessment.
JSC “ZASLON” is a research and manufacturing enterprise founded in 2001. In 2014, JSC “Scientific and Technical Center “Plant Leninets” was renamed JSC “ZASLON”. The Company executes government contracts for the supply of radio equipment and radar stations, multifunctional radar complexes, airfield air conditioners and electrical units, and also develops the field of medical equipment (portable ultrasound scanners).
key assessment factors
Medium assessment of the operational profile. The Company is one of the leaders in the fragmented market. The contract base is stable and its volume is more than three larger than the Company’s annual revenues. The assessment of the Dependence on Subcontracting and Components sub-factor is below medium, taking into account a large share of subcontractors (joint contractors) who are difficult to substitute.
The Company’s production sites are located in several regions. The national sales markets are well diversified, which results in the below-medium assessment of the geographic diversification of sales markets.
The medium level of corporate governance includes medium scores for the Management Strategy, Management structure and Financial Transparency sub-factors, while the Group Structure sub-factor received a high score.
The medium assessment of the financial profile takes into account the below medium score for the size of business; medium leverage (the ratio of total debt to FFO before net interest was 4.8x at the end of 2024 vs. 3.0x in 2023, and it is expected at 2.1x by the end of 2025); high scores for the profitability (the weighted average FFO before net interest and taxes margin is 11.2%) and the interest coverage (the ratio of FFO before net interest to interest was 2.7 in 2024 and is expected at 4.4x in 2025); very high score for the liquidity and high score for the cash flow.
KEY ASSUMPTIONS
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Production volumes in line with the business plan.
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Capex as per the provided financial model.
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Dividend payments in the forecast period as per the approved dividend policy.
potential outlook or rating change factors
The Positive outlook assumes that the rating will highly likely be upgraded within the 12 to 18-month horizon.
A positive rating action may be prompted by:
- Weighted average ratio of total debt (including lease payments and the guarantee issued by the Company) to FFO before net interest falling below 2.0x along with the ratio of total debt to equity declining below 1.0x and the ratio of FFO before net interest to interest (including lease payments) exceeding 4.0x;
A negative rating action may be prompted by:
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Weighted average FFO before interest and taxes margin falling below 10%;
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Weighted average ratio of total debt (including lease payments and the guarantee issued by the Company) to FFO before net interest exceeding 3.5x;
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Weighted average ratio of FFO before net interest to interest (including lease payments) falling below 2.5x.
RATING COMPONENTS
Standalone creditworthiness assessment (SCA): bbb+.
Support: none.
ISSUE RATINGS
No outstanding issues have been rated.
REGULATORY DISCLOSURE
The credit rating has been assigned to JSC “ZASLON” based on the following methodologies: the Methodology for Credit Ratings Assignment to Non-Financial Corporations under the National Scale for the Russian Federation to calculate the SCA and determine the credit rating of JSC “ZASLON” under the national scale for the Russian Federation; the Key Concepts Used by the Analytical Credit Rating Agency within the Scope of Its Rating Activities to ensure consistent and uniform application of ACRA’s methodologies, models, and key rating assumptions.
The credit rating of JSC “ZASLON” under the national scale for the Russian Federation was published by ACRA for the first time on November 1, 2023.
The credit rating and its outlook are expected to be revised within one year.
The credit rating was assigned based on data provided by JSC “ZASLON”, information from publicly available sources, and ACRA’s own databases. The rating analysis was carried out using the IFRS financial accounting statements of JSC “ZASLON” as of June 30, 2025.
The credit rating is solicited and JSC “ZASLON” 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 “ZASLON” during the year preceding the rating action.
No conflicts of interest were discovered in the course of credit rating assignment.
