The credit rating of Urozhai LLC (hereinafter, Urozhai or the Company) has been downgraded due to the very weak operating and financial performance in 2025 stemming from the failure of major crops coupled with a significant volume of payments expected for lawsuits filed against the Company, which led to lower scores for leverage, interest payment coverage, and liquidity. The credit rating is based on the very weak business assessment, which in turn is due to the weak vertical integration, low share of products with high added value, and low product diversification. The business assessment is also limited by operations that are primarily carried out on a leased land bank. The Company’s corporate governance practices are assessed by the Agency as very low in view of the very low financial transparency.
The financial profile assessment reflects the small business size, high leverage, low interest payment coverage, and very weak liquidity. The block of financial factors is positively affected by the very high profitability, which is typical for producers of sunflower seed (which accounts for the main share of revenues).
The outlook has been changed from Stable to Developing to reflect the risks related to the high degree of uncertainty with regard to the Company achieving its targets in 2026.
The Watch Status has been extended due to the unresolved situation with a significant lawsuit filed against the Company and the need to continue monitoring.
Urozhai is a small regional producer of grains and oilseeds in the Saratov Region. The Company sold 32,200 tons of products in 2025. The area of the Company’s agricultural land is 110,000 hectares.
KEY ASSESSMENT FACTORS
Weak assessment of the operating profile. Urozhai is a competitive producer in a highly fragmented local market for oilseeds and grains, which corresponds to a low score for market position according to the Agency’s methodology. In 2025, drought and crop diseases significantly reduced the yield of the Company’s main crops — sunflower and spring wheat — which in turn led to a decline in operational and financial performance. The Agency notes the Company’s limited ability to minimize losses and insufficient biosecurity measures.
The very weak assessment of business is due to the lack of vertical integration coupled with a low share of products with high added value. In addition, ACRA assesses Urozhai’s product diversification as low. By the end of 2025, the share of sunflower in revenues was 75% vs. 78% in 2024. This indicates the Company’s very high dependence on the key product, while in this factor assessment, ACRA takes into account the fact that sunflower seed is one of the most profitable agricultural crops.
In ACRA’s view, the Urozhai’s corporate governance is very low. Urozhai does not have a board of directors, while the sole owner, who is also the CEO, oversees all corporate operations. The Company’s equipment is insured, but crop failure risks and finished products are not. According to the Agency’s assessments, the financial transparency of the Company is very low since it only prepares RAS reports. As of the analysis, the Company had not completed the preparation of audited financial statements for 2025, and the preliminary financial statements provided contained significant errors.
Small business size and very high profitability. In 2025, Urozhai’s revenues amounted to RUB 578 mln compared to RUB 1,333 mln a year earlier (a decline of 57% year-on-year). According to the Company’s projections, revenues may exceed RUB 1.5 bln in 2026–2028 in the event of favorable weather conditions. According to ACRA’s calculations, FFO before net interest payments and taxes for 2023–2028 is RUB 260 mln or 0.012 bps of Russia’s GDP, which corresponds to a very low assessment of business size as per the Agency’s methodology.
Urozhai enjoys very high profitability, which is mainly due to the nature of its key product, sunflower seed. According to ACRA’s calculations, the FFO before net interest payments and taxes margin equaled 18% in 2025, which is assessed as very high.
High leverage and low interest payment coverage. The Company’s debt portfolio is primarily made up of bond issues that are repayable in 2026–2027. According to ACRA’s estimates, the ratio of total debt to FFO before net interest grew significantly in 2025 amid declining performance and amounted to 9.8x (vs. 2.9x in 2024). ACRA expects a gradual decline in the Company’s leverage in 2026–2028, while the weighted average ratio of FFO before net interest payments to interest payments for 2023–2028 is estimated by the Agency at 1.4x, which indicates low interest payment coverage.
Very low liquidity assessment. This assessment is based on the absence of available credit limits, as well as repayment peaks expected in 2026 and 2027 (when the Company will have to repay around 80% of its current debt), as well as expected substantial payments under lawsuits. The Agency notes that there is currently no certainty regarding the sources for the upcoming repayment of the bond issue in July 2026 in the amount of RUB 200 mln.
KEY ASSUMPTIONS
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Prices for grains and oilseeds in 2026–2028 at no lower than in 2025;
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Average yield returning to the level of 2022–2024, provided that climate risks do not materialize;
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Stable area of agricultural land at around 110,000 hectares;
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No annual dividend payments or significant capital expenditures in 2025–2027.
POTENTIAL OUTLOOK OR RATING CHANGE FACTORS
The Developing outlook assumes a variety of trends: the rating may stay unchanged, be upgraded or downgraded within the 12 to 18-month horizon.
A positive rating action may be prompted by:
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Weighted average ratio of total debt to FFO before net interest payments falling below 3.5x;
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Weighted average ratio of FFO before net interest payments to interest payments exceeding 2.5x;
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Significant improvement of corporate governance practices and financial transparency;
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Improved liquidity.
A negative rating action may be prompted by:
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Weighted average ratio of total debt to FFO before net interest payments exceeding 5.0x;
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Weighted average ratio of FFO before net interest payments to interest payments falling below 1.0x;
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Weighted average FFO before net interest payments and taxes margin falling below 15%;
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Weighted average FCF margin turning negative;
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Materialization of climate risks that result in further serious deterioration of the Company’s performance and financial standing.
RATING COMPONENTS
Standalone creditworthiness assessment (SCA): ccc/c.
ISSUE RATINGS
No outstanding issues have been rated.
REGULATORY DISCLOSURE
The credit rating has been assigned to Urozhai 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 Urozhai 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 Watch Status has been extended for the credit rating of UROZHAI LLC in accordance with the Key Concepts Used by the Analytical Credit Rating Agency within the Scope of Its Rating Activities.
The credit rating of Urozhai LLC assigned under the national scale for the Russian Federation was published by ACRA for the first time on May 24, 2023.
The credit rating was last published on May 13, 2025.
The credit rating and its outlook are expected to be revised within one year.
The Watch Status is expected to be retained for the credit rating for one year.
The credit rating was assigned based on data provided by Urozhai LLC, information from publicly available sources, and ACRA’s own databases. The rating analysis was performed using the RAS accounting (financial) statements of Urozhai LLC as of December 31, 2024.
The credit rating is solicited and Urozhai 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 Urozhai LLC during the year preceding the rating action.
No conflicts of interest were discovered in the course of credit rating assignment.
