Fitch Rating has affirmed JSC Georgian Railway's (GR) Long-Term Foreign- and Local-Currency Issuer Default Ratings (IDRs) at 'BB-' with a Positive Outlook.
The affirmation reflects Fitch's unchanged assessment of GR's links with the Georgian government. Its operating performance has slightly weakened in 2023 after a material improvement in 2022, but its financial profile remains commensurate with its Standalone Credit Profile (SCP) of 'b+' under Fitch's through-the-cycle rating case. This leads to a single-notch differential of GR's IDRs with Georgia's sovereign IDRs. GR's Outlook reflects that of the sovereign.
"Our assessment reflects GR's status as an integrated railway transportation monopoly, its 100% state ownership and the government's strategic control and oversight over GR's activities. The latter includes approval of the company's budgets and major investments. GR's supervisory board is nominated and controlled by the government, while goods and services are tendered in accordance with public procurement law. However, despite its natural monopoly GR retains some operational independence from the state, including deregulated tariff-setting", - reads the document.
As of the financial results for 9M2023, the Georgian Railway closed the mentioned period with a net profit of GEL 102 million. According to the document, the revenue of the railway during the period was GEL 481 million, which was 10 million less than the previous year.
