• Sign in
  • 1744009905_435.svg 1744009905_642.svg

  • Latest news
  • Top headlines
  • Most read
  • Columnists
O'zbekcha
Ўзбекча
Русский
  • O'zb
  • Ўзб
  • Рус
  • Eng
  • O'zb
  • Ўзб
  • Рус
  • Eng
  • Latest news
  • Top headlines
  • Most read
  • Columnists
    • USD12768.26
    • RUB162.63
    • EUR14400.04
    • Google play
    • App Store
    • Telegram
    • Tashkent
      +20°C
      • Andijan
      • Karshi
      • Bukhara
      • Samarkand
      • Ferghana
      • Sirdarya
      • Jizzakh
      • Termez
      • Namangan
      • Tashkent
      • Navoiy
      • Tashkent reg
      • Nukus
      • Urgench
    • Daryo
      • About Daryo
      • Editorial office
      • Contact us
      • Terms of use
      • Privacy policy
      • News archive
    • Advertisement
    • Social networks
      • Instagram | Main
      • Instagram | Lifestyle
      • Instagram | Sport
      • Facebook | Main
      • OK | Main
      • YouTube | Daryo
      • YouTube | Daryo in Russian
      • YouTube | Daryo Global
    Telegram Youtube Facebook Instagram Twitter vkontakte
    Daryo logo white
    • Uzbekistan
      • Others
      • Navoi
      • Tashkent region
      • Syrdarya
      • Jizzakh
      • Kashkadarya
      • Surkhandarya
      • Khorezm
      • Bukhara
      • Samarkand
      • Namangan
      • Fergana
      • Andijan
      • Karakalpakstan
      • Tashkent City
      • DaryoKindness
      • Weather
    • Central Asia
      • Uzbekistan
      • Afghanistan
      • Kyrgyzstan
      • Kazakhstan
      • Turkmenistan
      • Tajikistan
    • World
    • Money
      • Business
      • Economics
      • Finance
      • Crypto
    • Culture
      • Movies
      • Books
      • Music
      • Celebrities
    • Lifestyle
      • Women only
        • Children
        • Beauty
        • Carrier
        • Advises
        • Fashion
        • Recipes
      • Technology
        • Architecture
        • Gadjets
        • Science
        • Space
        • Media
      • Auto
      • Entertainment
      • Travel
      • Health
      • Education
        • Entrant
        • Learn english
    • Sport
      • Football
      • UFC
      • Boxing
    infinix
    Daryo.uz - Login
    Daryo.uz Daryo.uz
    Daryo.uz - Login
    Kazakhstan

    Fitch Ratings maintains BB+ for Kcell with Stable Outlook

    Fitch Ratings maintains BB+ for Kcell with Stable Outlook

    Fitch Ratings, a global credit rating agency, confirms the Long-Term Issuer Default Rating (IDR) of Kcell at 'BB+' with a Stable Outlook. The rating reflects the telecom company's close ties to its parent, Kazakhtelecom (Kaztel, BBB-/Stable), and its Standalone Credit Profile (SCP) of 'bb.'

    Logo of Kcell.
    Source: kursiv.kz

    The one-notch rating difference between Kcell and Kaztel emphasizes Kcell's status as a publicly traded company with significant minority ownership. It also underscores the commitment of the parent company to maintain Kcell as a distinct entity with minimal parental guarantees.

    The rating agency anticipates a decline in Kcell's credit metrics due to heightened capital requirements, increased interest, and dividend payments. Fitch expects the EBITDA net leverage to rise to 2.4x-2.9x in 2024-2026. Despite this increase, the leverage remains below the negative sensitivity threshold of 3.1x, albeit with limited headroom. The agency also foresees a weakening EBITDA interest cover from 2024.

    Key Rating Drivers

    • Increasing Leverage: Fitch projects a rise in Kcell's EBITDA net leverage, reaching 1.3x in 2023 and escalating to 2.4x-2.9x in 2024-2026. The company's credit metrics are expected to be impacted by substantial capital expenditures, 5G spectrum acquisition payments, and reinstated dividend payments.
    • Substantially Higher Capex: Kcell's capital expenditures are set to increase significantly, reaching 75% of revenue in 2023 and remaining high at 25%-35% in 2024-2025. This surge is attributed to the development of 4G infrastructure and the rollout of its 5G network, following the acquisition of relevant spectrum.
    • Steady Market Position, Some Attrition: Kcell, the second-largest mobile operator in Kazakhstan, retains around 30% subscriber market share. However, its market share has gradually declined due to underinvestment in 4G infrastructure. Investments in network upgrades and 5G rollout are expected to support its market positions.
    • EBITDA Margin Pressures: Fitch expects a decline in the EBITDA margin to 35.9% in 9M23 from 37.6% in 2022. The full-year impact of increased fees for spectrum and higher personnel costs are contributing factors. The agency anticipates a further decline to 30% in 2024.
    • Evolving Regulatory Environment: Changes in the regulatory environment in Kazakhstan, including the entry of a fourth mobile operator and potential changes in Kcell's ownership, pose uncertainties and may impact the company's competitive landscape.
    • Another 5G Auction Raises Uncertainty: An upcoming 5G spectrum auction in Kazakhstan may pose challenges for Kcell, with potential additional spectrum expenses and associated 5G network rollout requirements.

    Financial Implications and Assumptions

    Fitch envisions negative free cash flow generation for Kcell in 2023-2024 due to high capital expenditures, increased interest payments, and reinstated dividend payments. The agency expects Kcell to return to positive free cash flow from 2025, supported by growing EBITDA and lower capital expenditure requirements.

    Liquidity and Debt Structure

    Kcell's liquidity is assessed as comfortable in the short to medium term. With cash and cash-equivalent balances, investments, and undrawn revolving credit facilities, the company is well-positioned to cover its debt maturities until end-2025. However, additional debt may be required to finance the expected negative free cash flow.

    Issuer Profile

    Kcell, the second-largest mobile-only operator in Kazakhstan, holds a significant share of the country's telecom market. While it faces challenges, including declining market share and heightened capital expenditures, the company's strategic ties to Kaztel and its role as a key player in the mobile segment contribute to its overall credit profile.

     

    Follow Daryo's official Instagram and Twitter pages to keep current on world news.

    06.12.2023, 23:11   Comments (0)   1497
    Facebook Twitter LinkedIn Telegram Email

    Comments (0)

    Sign in
    Leave A Reply Cancel

    On this topic

    Fitch affirms Kazakhstan's Samruk-Kazyna at 'BBB' with $23bn debt

    24.11.2023, 01:18

    Fitch Ratings forecasts neutral sector outlook for CIS+ Banks in 2024  

    30.11.2023, 10:13

    Fitch Ratings confirms Kazakhtelecom's IDR at 'BBB-' with Stable Outlook

    06.12.2023, 22:36

    Kazakhstan at 20 million: populations and possibilities

    06.12.2023, 20:16

    Kazakhstan holds productive meeting with Russian ambassador to enhance bilateral relations 

    05.12.2023, 23:43

    Kazakhstan aims to enhance China-Europe cargo transit fivefold by 2029 

    05.12.2023, 22:41
    ×Lightbox Image

    Daryo.uz | Solution to your problems


    More than 500,000 new users: residents of Uzbekistan choose the Hambi superapp


    Beeline Uzbekistan started 2025 with a significant network modernization


    Don't want to waste time standing in lines? Pay your utility bills through the Ipoteka Retail mobile app?


    Beepul 's rising popularity: 3.5x user growth, transaction up 2.3x in 2024

     

    Recommended

    "We wouldn’t have won without U.S. aid" – The hidden truths behind the USSR’s World War II victory

    12 May, 15:39

    Uzbekistan's banking deposits surge to $25.2bn in March

    8 May, 17:24

    Uzbekistan to host 59th ADB Annual Meeting in Samarkand for second time

    8 May, 11:26

    Uzbekistan sees rise in cross-border travel as outbound tourism jumps 20%

    7 May, 12:38
     
     
     

    Latest news

    Kyrgyzstan open to global cooperation in fintech and digital economy, says PM Kasymaliev

    Kyrgyzstan | 30 May, 17:39

    Tashkent ranks among Central Asia’s top 3 cities in Global Cities Index 2025

    Uzbekistan | 30 May, 15:07

    Uzbeks migrating to Khanty-Mansi region are returning to their ancestral lands, says Russian MP

    Uzbekistan | 30 May, 14:00

    Kazakhstan and Italy explore investment fund to advance agro-industrial complex

    Kazakhstan | 30 May, 13:05

    Uzbekistan, Pakistan explore joint textile production as Yunus Textile Mills eyes investment opportunities

    Uzbekistan | 30 May, 12:00

    Uzbekistan’s banking sector sees NPLs ease to 4.2%

    Uzbekistan | 30 May, 10:43

    Kazakhstan and Uzbekistan to establish pediatric cancer center

    Uzbekistan | 30 May, 09:00

    Kazakhstan, Germany expand partnership in trade, energy, and investment

    Kazakhstan | 29 May, 17:25
    Daryo About Us

    Full reproduction or partial quoting of material, as well as the use of photographic, graphic, audio and/or video materials of Daryo (the Uzbek Press and Information Agency (UzAPI, now the Agency for Information and Mass Communications under the Presidential Administration of the Republic of Uzbekistan) is registered on 13.03.2015 with certificate number No. 0944 as a mass media) is allowed if there is a hyperlink to the website daryo.uz and/or are accompanied by a note indicating the authorship of the online publication Daryo. Individual publications may contain information that is not intended for users under the age of 18. Info@daryo.uz

    Telegram Youtube Facebook Instagram Twitter vkontakte

    © Simple Networking Solutions, 2013–2025

    Age restriction

    Did you find a bug? Press Ctrl + Enter

    • Terms of use
    • Privacy policy
    • Advertisement
    What are we going to search for?

    Sign In or Register

    Welcome Back!

    Login below or Register Now.

    Google

    or with email

    Leaving a comment, Пользовательского соглашения and Политики конфиденциальности

    Register Now

    Already registered? Login.

    Google

    or with email

    A password will be e-mailed to you.

    Leaving a comment, Пользовательского соглашения and Политики конфиденциальности

    Found an error in the text?

    ×

    Thank you. We have received your message and will fix the error as soon as possible.