S&P ups Russia's Kalina

Standard & Poor's said it raised its Russia national scale corporate credit rating on JSC concern Kalina to ruBBB+ from ruBBB based on Kalina's sustainable operating performance, improved credit metrics, and successful initial public offering.

"The upgrade takes into account Kalina's robust market position as a leader in a number of segments of the Russian cosmetics and personal-care market, strong profitability and significantly improved free operating cash flows, which, together with a moderate financial policy regarding acquisitions and consistently low debt levels, result in strong debt protection measures," said S&P credit analyst Tatiana Kordyukova.

"The rating on Kalina is constrained by intensive competition with international cosmetics companies in Russia; rising advertising costs; exposure to foreign-currency risk, given a high share of euro- and U.S. dollar-denominated costs and planned dollar-denominated debt and the seasonal and volatile nature of the cosmetics and personal-care products industry," added Kordyukova.

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