The credit rating of Joint Stock Company “Russian Crab” (hereinafter, the Company or the Group) is based on the high assessment of the operational risk profile, which takes into account the Group’s strong market position, moderately strong business profile and corporate governance, as well as the very high geographic diversification. The financial risk profile assessment reflects the very high profitability, strong liquidity, medium assessments of leverage and coverage, and the large size of business. The financial risk profile assessment is constrained by the cash flow metrics.
Joint Stock Company “Russian Crab” is a major Russian crab harvesting company. The Group holds the rights to catch around 26,700 tons of crab per year. The Company owns a crab fishing fleet that numbers 43 vessels.
key assessment factors
Strong market position. The Group is a major Russian crab harvesting company, with a market share of 25%. It is the leader of the king crab market. It also leads in terms of production of the most valuable species of crab, and holds market shares of 36% each for Kamchatka crab and blue crab.
Moderately strong business profile. The Company fishes different species of crab, including Kamchatka, blue, and snow crab, and others. The share of the main product — Kamchatka crab — amounted to 37.7% in the structure of revenues for 2024, which indicates high product diversification. Currently, the Company’s key area of focus — selling live crab — accounts for 91% of revenues and remains the most profitable area; the Company has 34 vessels for catching live crab. In addition, the Group is engaged in processing live crab into frozen products, for which purpose it has nine processor vessels that harvest and convert crab into frozen products at sea. The Company continuously monitors for changes in prices of live crab and frozen products in the key global markets for these products and if necessary can increase production of frozen products in order to maintain the highest profitability of sales. The business profile is supported by Russia’s largest crab production quota. The Company has the rights to catch crab in two key basins — the Far East and the North; the quotas are valid until 2034–2039. The Company has a crab fishing fleet that includes 43 vessels.
Very high geographic diversification. The Company holds quotas to operate in the Bering Sea, Sea of Okhotsk, Japanese Sea, and the Barents Sea. Assets are located in the direct vicinity of sales markets. The short transportation distance to the largest live crab consumption market (China) allows live crab to be delivered to consumers without loss of quality. Almost all of the Company’s products are exported, to the markets of China, Korea, Japan, and other countries, which provides for a flow of foreign currency.
Moderately strong assessment of corporate governance. ACRA positively assesses the Group’s strategy in terms of both achieved results and development potential. The high score for the sub-factor Management Structure is based on the Company having a board of directors with eight members, three of whom are independent directors. The board of directors has two committees — for audit and personnel and remuneration, and there is a tender committee under the management board. The Agency notes progress in formalizing the risk management system and the high level of insurance coverage of the key assets. Financial transparency is assessed as medium because the Group does not make IFRS reporting available to the public.
Large size of business and very high profitability. The Company’s revenues amounted to RUB 43 bln in 2024. The Agency forecasts significant growth of revenues this year due to an increase in the size of crab fishing quotas (quotas acquired in 2025 for work in the Northern and Far Eastern basins allow fish to be carried out starting from this year), followed by a slowdown in growth in 2026–2027. According to ACRA’s calculations, the weighted average FFO before net interest payments and taxes for 2022–2027 will be RUB 34 bln, which corresponds to a high assessment for size of business as per the Agency’s methodology.
In 2024, the FFO margin before net interest payments and taxes increased to 66% compared to 62% recorded at the end of 2023. ACRA expects the Group’s total revenues to stabilize in 2025–2027 close to last year’s level. According to the Agency’s calculations, the weighted average FFO margin before net interest payments and taxes will be 66.2% for 2022–2027, which corresponds to a very high score as per ACRA’s methodology.
Moderate leverage and medium interest payment coverage. The Agency notes the balanced structure of the Company’s debt portfolio. This is ensured by the terms of loans and the debt repayment schedule (the average loan term is 5.5 years with a comfortable repayment schedule), as well as by the currency structure of the portfolio and interest rates (54% of liabilities are attracted in foreign currency at low fixed rates). At the same time, the quality assessment of leverage is limited by significant dependence on the largest creditor. According to the Agency’s estimates, the ratio of total debt to FFO before net interest payments was 4.0x, and the weighted average value of this indicator for 2022–2027 will be 3.7x in 2024. At the same time, ACRA expects a systematic decrease in leverage as FFO before net interest payments grows.
According to the Agency’s estimates, the Company will hit a peak in terms of debt servicing in 2025 due to it raising funds for crab quotas in the Northern basin, that were obtained this year. The weighted average ratio of FFO before net interest payments to interest payments from 2022 to 2027 will be 2.5x according to ACRA’s projections, which corresponds to a medium assessment of debt service.
Medium liquidity and very weak cash flow. The Company’s liquidity assessment is high due to the weighted current liquidity ratio, which is 1.7, as well as the presence of unused limits on credit lines provided by banks. The very low assessment of the Cash Flow sub-factor is a consequence of a combination of a negative free cash flow (FCF) margin associated with significant capital expenditures and a very low assessment of the capital expenditure to revenue ratio (more than 50% of revenues in 2025). At the same time, ACRA expects the capital expenditure to revenue ratio to decrease to 10–15% in 2026–2027, which may contribute to FCF turning positive.
key assumptions
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The Company’s total quota in both basins at 26,700 tons;
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Investment expenditures as per the Company’s plans;
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Availability of external liquidity sources.
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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Weighted average ratio of FFO before net interest payments to interest payments exceeding 8.0x;
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Weighted average FCF margin exceeding 2% coupled with the weighted average ratio of capital expenditures to revenues falling below 12%.
A negative rating action may be prompted by:
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Maintaining the weighted average ratio of total debt to FFO before net interest payments above 3.5x;
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Weighted average ratio of FFO before net interest payments to interest payments falling below 2.5x.
rating components
Standalone creditworthiness assessment (SCA): a.
Support: none.
issue ratings
There are no outstanding issues.
regulatory disclosure
The credit rating has been assigned to Joint Stock Company “Russian Crab” 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.
A credit rating has been assigned to Joint Stock Company “Russian Crab” for the first time. 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 Joint Stock Company “Russian Crab”, information from publicly available sources, and ACRA’s own databases. The credit rating is solicited and Joint Stock Company “Russian Crab” 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 Joint Stock Company “Russian Crab”. No conflicts of interest were discovered in the course of credit rating assignment.
