The credit rating of International Medical Center of Biomaterials Processing and Cryostorage Public Joint-Stock Company (hereinafter, IMCB, Gemabank, or the Company) has been affirmed based on the Company maintaining the assessments of the operational and financial risk profiles. The market position and business profile take into account Gemabank’s retention of leading positions in the narrow industry segment of banking of human cells and tissues. Corporate governance is assessed as medium. The financial block of factors is characterized by very high profitability with a small business size, low leverage with a medium level of debt servicing, as well as very strong cash flow and strong liquidity.
IMCB is the largest bank for personal storage of hematopoietic and mesenchymal cord blood stem cells in Russia for the treatment of critical illnesses. IMCB was founded in 2014 in order to more effectively manage the Gemabank project. The Company owns the exclusive rights to the Gemabank and Gemascreen trademarks.
IMCB is a subsidiary of PJSC Artgen (ACRA rating: BBB-(RU), outlook Stable, hereinafter, Artgen, or the Group) and is the guarantor of its bonds. IMCB is one of the main sources of financing for Artgen’s projects, therefore, when assessing the Company’s creditworthiness, the Group’s influence on it was taken into account.
KEY ASSESSMENT FACTORS
Medium operational risk profile assessment. The Company is mainly focused on providing services for the collection, isolation, cryopreservation, and storage of cord blood and umbilical cord cells. Gemabank continues to work on expanding its line of products and services, in particular, developing drugs to treat blood diseases using hematopoietic stem cells. The predominantly long-term nature of contracts for the storage of biomaterials (up to 20 years) provides the Company with stable revenues for cell storage services. The Company’s share in the Russian market remains at about 40%. At the end of 2024, Gemabank had over 43,000 samples in storage, an 8% increase compared to 2023. IMCB operates in 85 cities of Russia and has representatives in Kazakhstan and Armenia.
Small size of business and very high profitability. IMCB’s revenues amounted to RUB 349 mln in 2024, while FFO before net interest payments and taxes was RUB 194 mln, which amounts to growth of 23% and 15% year-on-year, respectively. Weighted average FFO before net interest payments and taxes for 2022 to 2027 is RUB 182 mln. The weighted average FFO margin before net interest payments and taxes for the same period is 53%.
Low leverage and medium debt coverage. The Company’s loan portfolio includes two bonds due in 2027 and 2029. ACRA does not include the guarantee provided by IMCB for the parent company’s bond as debt because it takes it into account in the assessment of Artgen. The presence of this guarantee coupled with financing the development of the Group’s projects using issued loans and significant dividend payments is reflected in the assessment of the Group’s influence on Gemabank by reducing the Company’s standalone creditworthiness assessment (SCA) by one notch.
The ratio of total debt to FFO before net interest payments declined to 1.4x in 2024 from 1.5x in 2023. The weighted average value of this ratio for 2022–2027 is 1.5x, which indicates that IMCB’s leverage is low.
Debt coverage remains medium: the weighted average ratio of FFO before net interest payments to interest payments is 5.1x. The indicator improved to 6.1x in 2024 compared to 5.4x a year earlier, which was due to FFO before net interest payments increasing.
Strong liquidity and very strong cash flow. The very high value of the weighted short-term liquidity ratio and the medium assessment of the quality of liquidity that factors in the peak repayment period on bonds (the Company’s sole funding source) in 2027 allow us to conclude that the resulting factor assessment is high.
The share of capital expenditures in IMCB’s revenues was 3% in 2024 and ACRA expects it to be 5% in the forecast period (from 2025 to 2027). The Company pays dividends in accordance with the approved dividend policy. The free cash flow (FCF) margin was 24% in 2024, while the weighted average value of this indicator for 2022–2027 is 16%.
Medium corporate governance assessment. The Company publishes RAS financial statements (Gruppa Finansy LLC was the auditor for 2024). Gemabank’s performance indicators are also consolidated and published in the IFRS financial statements of Artgen. ACRA positively assesses the presence of a board of directors and a board committee at the Company, and the disclosure of key operational and financial indicators.
KEY ASSUMPTIONS
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No additional financing in 2025–2026;
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Capital expenditures in the forecast period as per the financial model presented to the Agency;
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Dividend payments at 80% of net profits in 2025–2027;
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No new loans from the Company to the Group’s companies.
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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The Group’s credit rating being upgraded;
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Weighted average ratio of total debt to FFO before net interest payments falling below 1.0x;
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Weighted average ratio of FFO before net interest payments to interest payments exceeding 5.0x.
A negative rating action may be prompted by:
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The Group’s credit rating being downgraded;
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Weighted average FFO margin before net interest payments and taxes falling below 8%;
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Weighted average ratio of total debt to FFO before net interest payments exceeding 5.0х;
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Weighted average ratio of FFO before net interest payments to interest payments declining below 1.0х;
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Weighted average FCF margin falling below 5% and weighted average ratio of capital expenditures to revenues exceeding 10%;
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Significant deterioration of the liquidity profile.
RATING COMPONENTS
SCA: bbb.
Group’s influence: SCA minus one notch.
ISSUE RATINGS
No outstanding issues have been rated.
REGULATORY DISCLOSURE
The credit rating has been assigned to International Medical Center of Biomaterials Processing and Cryostorage Public Joint-Stock Company 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, Methodology for Assigning Credit Ratings with External Support, and the Key Concepts Used by the Analytical Credit Rating Agency within the Scope of Its Rating Activities.
The credit rating of International Medical Center of Biomaterials Processing and Cryostorage Public Joint-Stock Company was published by ACRA for the first time on July 20, 2022. The credit rating 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 International Medical Center of Biomaterials Processing and Cryostorage Public Joint-Stock Company, information from publicly available sources, and ACRA’s own databases. The credit rating is solicited and International Medical Center of Biomaterials Processing and Cryostorage Public Joint-Stock Company 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 International Medical Center of Biomaterials Processing and Cryostorage Public Joint-Stock Company. No conflicts of interest were discovered in the course of credit rating assignment.
