October 17, 2018 Rating Committee of the rating agency Expert Rating decided to raise the rating of the bond issue of VAB Leasing Company (EDRPOU code 33880354) to uaBBB + on the national scale. A separate debt instrument with a uaBBB + rating is characterized by sufficient creditworthiness compared to other Ukrainian borrowers or debt instruments. The level of solvency depends on the influence of adverse commercial, financial and economic conditions. The agency increased the credit rating after analyzing the financial statements of VAB Leasing for the first half of 2018, as well as special and regular information of the Company as an issuer of securities.
1. The equity capital of VAB Leasing for the period from June 30, 2017 to June 30, 2018 increased by 5.81% to UAH 74.86 million. Gross liabilities of the Company for the same period increased by 42.05% to 127.36 million UAH. As a result of lower rates of growth in equity compared to the increase in liabilities, the ratio between these indicators in VAB Leasing decreased by 20.10%. and at the end of the second quarter of 2018 was 58.78%.
2. The total debt of the Company to investors in bonds grew during the analyzed period by 179.45% and at the end of the second quarter of 2018 amounted to UAH 33.35 million. The Agency reminds that in July 2016, the issuer made changes to the issuer’s prospectus in accordance with the current legislation, according to which VAB Leasing extended the circulation period of series B bonds, which was previously set to October 9, 2016, by October 4, 2020. The Agency also informs that on October 8, 2018, the Issuer made payment of the next coupon on the bonds in full.
3. VAB Leasing business activity in the analyzed period increased. Thus, the net income from sales in the first half of 2018 amounted to UAH 156.59 million, which is 30.80% more than in the same period of 2017. At the same time, the financial result from the Company’s operating activities grew by 44.90% to UAH 19.87 million, and net profit increased by 25.78% to UAH 7.13 million. The agency reminds that in April 2017 VAB Leasing received an unlimited license from the National Financial Services Commission for the provision of financial leasing services. The presence of a perpetual license is considered by the Agency as a positive factor, strengthening the Company’s position in the leasing market.
4. As of the end of the second quarter of 2018, VAB Leasing had 698 contracts in its leasing portfolio, which is 4 contracts less than a year earlier. At the same time, the total value of leasing contracts increased by 22.76%. At the same time, the cost of leasing contracts with individuals also increased: by 18.75% to UAH 51.53 million. During the analyzed period, the cost of leasing contracts from the 3 largest clients in VAB Leasing decreased by 3.88% and amounted to 9.2% of the total value of the Company’s leasing portfolio, which indicates good portfolio diversification and low dependence of VAB Leasing on large customers .
5. Despite the increase in the cost of leasing contracts by 22.76%, the reserve for bad debts in the Company grew by only 1.72% to UAH 19.33 million.
Thus, analyzing the financial and management reporting data for the first half of 2018 provided by VAB Leasing, the Agency notes: an increase in business activity, an increase in financial results, and a good diversification of the Company’s asset portfolio, amid a decreasing ratio between equity and liabilities.
VAB Leasing Company is a Member of the Association “Ukrainian Union of Lessors”.