The credit rating of RKS-Holding LLC (hereinafter, RKS-Holding, the Company, or the Group) is based on the very low industry risk, strong market position in its regions of presence, strong operational profile assessment, very low leverage, very high interest payment coverage, as well as high scores for business profitability and liquidity. The rating is constrained by, among other things, the medium size of business, regulatory risks, and the medium free cash flow (FCF).
RKS-Holding is one of the largest utilities operators in Russia, providing water supply and wastewater discharge services (its key business), as well as supplying heat and electricity. RKS-Holding operates in nine Russian regions: the Amur Region, Samara Region, Tambov Region, Ulyanovsk Region, Penza Region, Kirov Region, Perm Krai, the Republic of Karelia, and the Khanty-Mansi Autonomous Okrug — Yugra. The Group includes companies that operate on the basis of lease and concession agreements, as well as other operating assets that support the Group’s activities. The Company is currently digitalizing its billing and operating procedures.
KEY ASSESSMENT FACTORS
High profitability and low price risks. RKS-Holding provides services in the segment of natural monopolies. There is almost no competition in the utilities sector, prices for services are relatively predictable, and demand is inelastic and responds very little to price changes. The Company’s position is strengthened by increasing the share of regions in the revenue structure where concession agreements are concluded between local authorities and the Company, which reduces the risk of replacement of the operator of water supply and wastewater discharge infrastructure. These regions account for more than half of the Company’s total revenues and EBITDA. Sales risks are associated with consumer non-payments. According to ACRA’s estimates, the Company operates in regions with moderate levels of socioeconomic development.
In 2024, the Company’s revenues continued to demonstrate organic growth, having increased by 4% year-on-year (to RUB 39.3 bln), which facilitated moderate growth of volumes of useful supply across core business lines. In 2025, ACRA assumes that the Group’s revenues increased by 17% year-on-year (to RUB 45.9 bln) amid growth of tariffs and moderate growth of consumption. The Company’s weighted average FFO before net interest payments and taxes margin is around 22% for 2022–2028.
Moderate investment commitments. The Company’s investments in production assets amounted to RUB 6.5 bln excluding VAT in 2024 (RUB 7.2 bln excluding VAT in 2023). Capital investments are aimed at reconstructing, modernizing, and technically re-equipping water supply and wastewater discharge systems managed by the Company in order to improve their reliability and efficiency. Part of these investments is covered by budget subsidies, as well as concessional loans from the Territorial Development Fund. The Company’s investment plan involves investing up to RUB 10 bln per year until 2028. The weighted average ratio of investments to revenues for 2022–2028 stands at around 17.2%. ACRA currently assesses the depreciation of the Company’s fixed assets as moderate.
Very low leverage and very high interest payment coverage. As of January 1, 2026, the Company’s debt portfolio amounted to RUB 4.5 bln. Most of the debt consists of RUB-denominated bank loans, while the portfolio is largely represented by loans with a floating rate linked to the key rate of the Bank of Russia. The structure of lenders is balanced. At the end of 2024, total debt was RUB 3.7 bln or 0.5x of FFO before net interest payments. ACRA assumes that this indicator will remain below 1.0x from 2025–2028. The ratio of FFO before net interest payments to interest payments was 10.7x at the end of 2024, and, according to ACRA’s calculations, the weighted average of this indicator will exceed 10.0x in the forecast period.
Medium score for FCF and high liquidity. The Company’s FCF was around RUB 3 bln for 2024. Taking into account the upcoming growth of the investment program, the Agency believes that FCF will be negative in 2025–2026 and return to positive territory in 2027. The weighted average FCF margin before dividends for 2022–2028 is 1.3% according to the Agency’s calculations.
ACRA assesses the Group’s liquidity as good. As of January 1, 2026, the Company had RUB 5.5 bln of free cash in its accounts. RKS-Holding has also available credit limits totaling RUB 10.1 bln.
KEY ASSUMPTIONS
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Implementation of the capital development program as planned;
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Dividend payouts in 2026–2028 as declared;
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Maintaining current access to external liquidity sources.
potential outlook or rating change factors
The Stable outlook assumes that the credit rating will highly likely stay unchanged within the 12 to 18-month horizon.
A positive rating action may be prompted by:
- Annual weighted FFO before net interest payments and taxes exceeding and staying above RUB 30 bln, annual weighted FFO before net interest and taxes margin exceeding and staying above 25%, and a significant expansion of the scale of business.
A negative rating action may be prompted by:
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FFO before net interest payments and taxes falling below RUB 5 bln and FFO before net interest payments and taxes margin falling below 15%;
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Coverage (FFO before net interest payments to interest payments) falling below 10.0x;
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Significant deterioration of access to external liquidity sources.
rating components
Standalone creditworthiness assessment (SCA): аа-.
issue ratings
There are no outstanding issues.
regulatory disclosure
The credit rating has been assigned to RKS-Holding LLC based on the following methodologies: the Methodology for Assigning Credit Ratings to Non-Financial Corporations under the National Scale for the Russian Federation to calculate the SCA and determine the credit rating and the credit rating outlook of RKS-Holding LLC 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 to ensure consistent and uniform application of ACRA’s methodologies, rating scales, models, and key rating assumptions. The principles of the following methodologies were also applied: the Methodology for Assigning Credit Ratings to Regions and Municipal Entities under the National Scale for the Russian Federation to assess the economic development of the regions of presence of the rated entity.
The credit rating of RKS-Holding LLC assigned under the national scale for the Russian Federation was published by ACRA for the first time on March 27, 2018.
The credit rating and its outlook are expected to be revised within one year.
The credit rating was assigned based on data provided by RKS-Holding LLC, information from publicly available sources, and ACRA’s own databases. The rating analysis was performed using the IFRS accounting (financial) statements of RKS-Holding LLC as of December 31, 2024.
The credit rating is solicited and RKS-Holding 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 RKS-Holding LLC during the year preceding the rating action.
No conflicts of interest were discovered in the course of credit rating assignment.
