The credit rating of AREAL International Joint-Stock Company (hereinafter, AREAL IJSC or the Company) has been affirmed based on it maintaining the weighted credit metrics within the ranges established for the given rating level.
AREAL IJSC’s credit rating is determined based on the high score for market position: the Company is one of Russia’s five largest gold producers. The medium assessment of business reflects the medium score for production costs and resource base sufficiency as per ACRA’s methodology, and the medium assessment of product diversification based on the Agency’s methodology (gold accounts for the main share of revenues). The credit rating is supported by the strong score for geography and the financial profile.
AREAL IJSC mines gold in the Khabarovsk Krai, the Republic of Buryatia, the Chukotka Autonomous Okrug, and the Kamchatka Krai.
KEY ASSESSMENT FACTORS
The medium assessment of business reflects the medium score for the Cost of Production sub-factor (which is at the level of peer foreign and domestic companies). ACRA assesses the sub-factor Resource Base Sufficiency as medium based on the Agency’s methodology. Since AREAL IJSC, in addition to gold, also produces zinc and lead, the Product Diversification sub-factor is assessed as medium.
The Agency notes the strong assessment of the Geography factor. The sub-factor Availability and Diversification of Sales Markets received a very high score taking into account the fact that the Company is a producer of precious metals. The sub-factor Concentration on a Single Field is also assessed as very high since the Company’s largest operating asset accounts for no more than 30% of the consolidated production volume.
The assessment of corporate governance is medium in terms of the industry. The financial transparency sub-factor is assessed as medium for the corporate sector — the Company makes its IFRS reporting on a quarterly basis, but does not disclose it to the public.
The financial profile assessment takes into account the medium-high scores for size, profitability, and cash flow, and the medium score for leverage (the ratio of total debt to FFO before net interest payments was 3.6x in 2024). The assessment of debt coverage remained high, as the weighted ratio of FFO before net interest payments to interest payments confidently exceeds 5.0x.
Liquidity is above medium (as per the Agency’s methodology), in view of the Company possessing a sufficient volume of undrawn limits under provided credit lines.
key assumptions
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Production volume in line with the Company’s business plan;
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Capital expenditures as per the business plan;
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Weighted dividend policy throughout the forecast period from 2026 to 2028.
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:
- Leverage (ratio of total debt to FFO before net interest payments) falling below 2.0x coupled with debt coverage (ratio of FFO before net interest payments to interest payments) exceeding 10.0x.
A negative rating action may be prompted by:
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Dividend payments in the forecast period, which may result in the FCF margin falling below 10%;
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Debt coverage (ratio of FFO before net interest payments to interest payments) falling below 5.0x.
RATING COMPONENTS
Standalone creditworthiness assessment (SCA): aa-.
ISSUE RATINGS
No outstanding issues have been rated.
REGULATORY DISCLOSURE
The credit rating has been assigned to AREAL International Joint-Stock Company 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 AREAL International Joint-Stock Company 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 credit rating of AREAL International Joint-Stock Company assigned under the national scale for the Russian Federation was published by ACRA for the first time on April 23, 2024.
The credit rating was last published on April 17, 2025.
The credit rating was assigned based on data provided by AREAL International Joint-Stock Company, information from publicly available sources, and ACRA’s own databases. The rating analysis was performed using the IFRS accounting (financial) statements of AREAL International Joint-Stock Company as of December 31, 2024.
The credit rating is solicited and AREAL International 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 AREAL International Joint-Stock Company during the year preceding the rating action.
No conflicts of interest were discovered in the course of credit rating assignment.
