We have revised down our forecast for Energo-Pro's financial metrics in 2018-2019, due to lower recovery in hydropower generation volumes, growing costs, and exposure to country risks including currency volatility, which in our view offsets the benefits of country diversification. We are therefore lowering our long-term ratings on Energo-Pro to 'B+' from 'BB-'. The stable outlook reflects our expectations that consolidated funds from operations to debt at the level of Energo-Pro's parent, DKHI, will improve above 12% (corresponding to approximately 15% at Energo-Pro), but parent-level free operating cash flow will remain negative because of heavy capital expenditure. On Dec. 7, 2018, S&P Global Ratings lowered its long-term issuer credit rating on the Czech electricity multi-utility ENERGO-PRO a.s. (Energo-Pro) to 'B+'
