Moody's affirms Kazatomprom at Baa1, upgrades baseline credit assessment to baa2Moody's Ratings has affirmed the long-term rating of Kazakhstan's state nuclear company Kazatomprom at Baa1 and upgraded its baseline credit assessment (BCA) to baa2 from baa3, with a stable outlook.The upgrade reflects Kazatomprom's strong operational and financial track record, high profitability, solid liquidity and conservative financial policy, with strong credit metrics and net cash balances that have held up through the uranium price cycle, Moody's said.The agency also cited Kazatomprom's strategic importance to the Kazakh government and its high level of state control through majority shareholder Samruk-Kazyna.Moody's said the BCA is supported by low production costs from in-situ leaching technology, rising uranium demand, long-term customer contracts and geographically diversified sales. Kazatomprom accounts for about 20% of global uranium production and holds one of the world's largest uranium resource bases.Constraining factors include high business concentration, with over 90% of revenue from uranium and uranium products, asset concentration in a single country, uranium price volatility, production risks, high capital expenditure and significant dividend payments."The stable outlook for Kazatomprom is aligned with the outlooks for the government of Kazakhstan and Samruk-Kazyna," Moody's said.An upgrade is possible if Kazakhstan's sovereign rating and Samruk-Kazyna's rating are raised, or if Kazatomprom substantially increases its scale and business diversification. A downgrade could follow a lowering of the sovereign or Samruk-Kazyna ratings, or a material deterioration in the company's operating and financial performance.Kazatomprom is engaged in uranium mining, rare metals processing, and production and sales of beryllium and tantalum products, all of which are exported. The company is state-controlled, with Samruk-Kazyna holding 62.99% and the Finance Ministry 12.01%, while free float stands at 25%. (ICE ALMATY)

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