Research Update: Uzbekistan-Based Aluminum And PVC Profiles Manufacturer Akfa Aluminium LLC Assigned 'B+/B' Ratings; Outlook Stable

Akfa Aluminium LLC (Akfa), with sales of about Uzbekistani som (UZS) 4,360 billion ($347 million) in 2023, is the largest aluminum and PVC profiles manufacturer in Uzbekistan and one of the largest in Central Asia. In our analysis, we consider Akfa's dominant franchise on the rapidly expanding Uzbekistan building materials market, somewhat offset by its small size and limited product and geographic diversification in a global context, alongside the group's well-invested asset base and substantial automatization, supporting our forecast of S&P Global Ratings-adjusted EBITDA margins above 20% over 2024-2025. Although Akfa has modest reported debt and solid capacity to generate positive free cash flow, a guarantee to a related party will result in S&P Global Ratings-adjusted debt to EBITDA of

...- Akfa Aluminium LLC (Akfa), with sales of about Uzbekistani som (UZS) 4,360 billion ($347 million) in 2023, is the largest aluminum and PVC profiles manufacturer in Uzbekistan and one of the largest in Central Asia. - In our analysis, we consider Akfa's dominant franchise on the rapidly expanding Uzbekistan building materials market, somewhat offset by its small size and limited product and geographic diversification in a global context, alongside the group's well-invested asset base and substantial automatization, supporting our forecast of S&P Global Ratings-adjusted EBITDA margins above 20% over 2024-2025. - Although Akfa has modest reported debt and solid capacity to generate positive free cash flow, a guarantee to a related party will result in S&P Global Ratings-adjusted debt to EBITDA of about 2x in 2024-2025. - We therefore assigned our 'B+/B' long- and short-term issuer credit ratings to Akfa. - The outlook is stable, indicating that Akfa will translate growth of the domestic...

Research Update