Rating Agency Expert Ra confirmed the credit rating of the non-financial company Arkhangelsk PPM to be at ruA. The outlook is stable (https://raexpert.ru/releases/2020/jul14b).

Arkhangelsk PPM JSC (hereinafter referred to as "company", "Group", "APPM JSC") is one of the leading pulp and paper companies in Russia. APPM JSC is the parent company that consolidates all operating assets of the Group which includes 7 organizations. The key ones are Europack Group LLC and Arkhbum JSC, engaged in the production of corrugated packaging and corrugated cardboard, as well as Arkhbum Tissue Group LLC focused on the production of sanitary products and Arkhbum LLC which provides forwarding services to the Group companies.

APPM JSC is among the top-five largest companies producing pulp, container board and offset paper that cover 10 %, 10 % and 15 % of the market, correspondingly. At the same time, there is a high geographic diversity of the products sold, the export revenue share for 2019 (hereinafter referred to as "the reporting period") accounted for the countries of Europe and Asia was 19%. Decrease in the export revenue share by 4 percentage points for the reporting period is explained by the greater domestic market focus of the Group.

Based on the results of 2019, the Tissue group is the main leader both in terms of market growth prospects and profitability compared to other groups ("packaging", "graph papers", "flexible packaging", "pulp" and "wood products").

The Group continues to make massive investments to increase efficiency, expand capacities and update equipment and energy system. The aim of the latter is a complete switching to natural gas that will reduce emissions, including greenhouse gases in the air with the increase in production.

In addition to that, the construction of a new plant in Ulyanovsk began in order to expand the Group's corrugated board division. In the next 18 months from 31 December, 2019 (hereinafter referred to as "the reporting date"), the capital expenditures will reach 16 billion rubles which will make up more than 80% of the main liquidity use areas.

The shareholder’s refusal to distribute dividends in 2020 provides significant support to the indicator.

According to the IFRS reporting, the assets of Arkhangelsk PPM as of 31 December, 2019 amounted to 66.8 billion rubles, the capital – 33 billion rubles. The revenue for 2019 amounted to 38.6 billion rubles, the net profit – 6.2 billion rubles.