June 15, 2024
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Bulgaria: S&P – NEK’s rating upgraded to BB with a stable outlook

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Rating agency Standard & Poor’s (S&P) raised long-term issuer credit rating on National Electricity Company to BB from BB- with a stable outlook due to its improved credit indicators.

The stable outlook reflects S&P’s expectation that parent company BEH will continue to provide liquidity support to NEK and its other subsidiaries, maintaining low debt levels during 2023-2025, while improving its revenue profile.

NEK is seen as a strategically important subsidiary of BEH, given its role in Bulgaria’s energy landscape as a zero-emission hydropower producer and public electricity supplier, while also making up nearly 20 % of the parent company’s earnings before interest, taxes, depreciation and amortization (EBITDA). However, S&P expects that due to the delayed electricity market liberalization until 2025, NEK’s independent credit profile and financial results could be impacted.

The company’s rating could be raised further if BEH’s credit profile improves to bbb- on the back of higher stability of the group’s profitability and clearer execution of national energy transition policies.

NEK recorded a net profit of 60 million euros in the first quarter of 2023, compared to a net loss of 4.3 million euros in the same period last year.

The company’s total revenues increased to 562 million euros in the first quarter from 522 million euros in the same period of 2022, despite a 39 % annual drop in revenues from sales to 244 million euros.


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