10.12 2015

Standard & Poor’s reaffirms Katren's rating for the third time

On 3 December 2015, Standard & Poor's international rating agency reaffirmed the Katren's corporate ratings.

For the third year in a row, the company was given the following ratings:

Credit rating on the national scale: AA-

Long-term credit rating on the international scale: BB-

Short-term credit rating on the international scale: B

Rating outlook: Stable

The company's business risk profile is rated as “weak”, primarily due to the low profitability of the volatile pharmaceutical distribution industry. The high level of competition on the Russian pharmaceutical distribution market and its heavy reliance on consumer spending, in contrast to Western countries, where public health insurance systems reimburse the cost of medicines for the public, also plays its part.

The company's financial risk profile is rated as “moderate”, which reflects its relatively low debt burden. Liquidity was assessed as “adequate”.

A special focus was placed on the positive influence of operational efficiency of the management, as evidenced by Katren's sustained profitable growth, which made it the Russian market leader, and the lowest level of operating costs in the industry.

Standard & Poor's estimates the rating outlook to be “stable”, assuming that Katren will maintain its key indicators for the next two years.

To recap, Katren is the only Russian pharmaceutical distributor to receive a credit rating from an international agency. Of particular significance is the fact that this happened against the background of major pharmaceutical distributors leaving the market and/or reducing their activity due to financial problems.

Background information:

Standard & Poor’s is a financial services company, one of the “big three” international rating agencies. It specializes in publishing analytical reports and research on financial markets.

Katren is the leader of the Russian pharmaceutical market. The company has been ranked first in terms of market share among Russian pharmaceutical distributors since 2013 (according to RNC Pharma). Katren's sales in 2014 amounted to $4.1 billion. According to RNC Pharma, the company's share of the pharmaceutical market grew by 3.3% over the first 9 months of 2015 to reach 18.6%.