Akfa Aluminium LLC

Overview Key strengths Key risks Dominant domestic franchise, supported by rapid domestic market expansion. Untested financial policy and evolving governance.Predominantly short-term funding. Above-average profitability. Limited scope and low geographical diversity. Low debt burden. Exposure to input costs and foreign currency volatility. We think the company will be able to raise prices to offset any cost increases, while strong domestic market demand translates into yearly revenue growth of around 18%-19% and adjusted EBITDA margins of 20.5%-21.0% in 2024 and 2025. We assume Uzbekistan and, to a lesser extent, neighboring countries, will continue to bring in 95% of revenue and the bulk of EBITDA in the next two years. In our base case we assume adjusted leverage will increase in 2024, with

...We forecast AKFA Aluminium LLC (Akfa) to generate solid S&P Global Ratings-adjusted EBITDA margins in the next two years. We think the company will be able to raise prices to offset any cost increases, while strong domestic market demand translates into yearly revenue growth of around 18%-19% and adjusted EBITDA margins of 20.5%-21.0% in 2024 and 2025. We assume Uzbekistan and, to a lesser extent, neighboring countries, will continue to bring in 95% of revenue and the bulk of EBITDA in the next two years. Akfa's use of free operating cash flow (FOCF) as well as its leverage and cash flow volatility are the key drivers of its credit metrics. In our base case we assume adjusted leverage will increase in 2024, with adjusted funds from operations (FFO) to debt of 38% (83% in 2023) and...

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