Credit rating agency ACRA has lowered Raspadskaya’s rating to AA(RU), keeping a negative outlook. The reason is a deterioration in financial performance: the company is incurring losses, and profitability and cash flow have moved into negative territory. Against this backdrop, the coal holding is shifting to a strategy of “managed consolidation,” which involves the gradual closure of unprofitable mines.
According to ACRA, the rating was lowered because of weaker assessments for size, profitability, and free cash flow. FFO before net interest payments and taxes fell below 1.5 basis points of GDP, FFO margin fell below 20%, and FCF margin fell below minus 3%. The agency does not rule out that these metrics will remain at the same levels at the end of 2026. The negative outlook reflects the likelihood of a less confident recovery in 2027 and possible borrowing.
The financial picture under RAS for nine months looks heavy. Raspadskaya’s net loss reached RUB 3.65 billion versus RUB 1.08 billion a year earlier. Revenue fell 35.5% to RUB 7.79 billion. Cost of sales declined by only 5.1%, to RUB 11.55 billion, so gross loss grew 36-fold. Loss from sales increased 4.6-fold, to RUB 4.72 billion.
A new strategy has been the response to the pressure. Finance Vice President Stanislav Kuznetsov described it as “managed consolidation”: old unprofitable mines will be gradually closed, the number of longwalls will be increased at promising operations, and open-pit mining will be expanded. Underground mining in Kuzbass, he said, is “beyond the edge of profitability,” and there is no reason to count on a significant rise in global demand and prices.
Problems have been accumulating all year. In the first half, production fell 12% to 7.9 million tonnes, and the net loss was RUB 8.3 billion. The company suspended mining at the Raspadsky open pit, but it is now operating normally and increasing volumes. In September, Tuva’s Mezhegeyugol was sold to Novosibirsk’s Promresurs. At the same time, a tender was announced for a feasibility study on mothballing the Osinnikovskaya mine. At the end of September, a fire occurred at the flagship Raspadskaya mine: Rostekhnadzor suspended mining operations for 90 days, by mid-October the affected area had been isolated, and the event was reclassified as an accident at a hazardous production facility.
The downgrade reflects the reality of the coal market: high costs and weak prices leave no room to maneuver. “Managed consolidation” is an attempt to cut losses by shedding the worst assets, but without a recovery in coking coal prices even this strategy yields only a limited effect.
Source: Finam
Image: PJSC Raspadskaya
