X5 Retail Group N.V.– S&P Outlook Revised to Stable
10 Jul 2007
Amsterdam, 10 July 2007 – On 9 July Standard & Poor’s Rating Services revised its outlook for X5 Retail Group N.V. (LSE: FIVE), Russia’s leading food retailer in terms of sales, and its subsidiaries to stable from negative. At the same time, the ‘BB-‘long-term corporate credit rating was affirmed.
Standard & Poor's also assigned its 'BB-' long-term corporate credit and 'ruAA-' Russia national scale ratings to the financing vehicle X5 Finance LLC and its forthcoming Russian rouble 9 billion (US $350 million) senior unsecured bonds.
In the report released yesterday Standard & Poor's stated “…the expanding growth of Russia's retail market, which is in the early stages of development, means significant growth potential for the group. Strongly positive personal income trends in X5's target markets, combined with the group's leading market position and economies of scale, support the ratings. Added to this is X5's prudent cost management, which supports strong profitability and cash flow growth.”
The outlook for the rating is stable as there is “…expectation that X5's financial profile will improve from the level reached at year-end 2006.”
Commenting on the S&P report Vitaliy Podolskiy, Group CFO, said:
“We are encouraged by the upgrade of our rating which recognises our post-merger integration progress and financial and risk management efforts. We are continuing to strengthen our position as a leader in the fast growing grocery retail market in Russia, while effectively implementing strict cost control measures and financial soundness in this highly dynamic environment. ”
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