Creditreform Rating has confirmed the unsolicited corporate issuer rating of Electricity Supply Board (ESB) with A, and adjusted the outlook from negative to stable. The current rating attests ESB as having a high level of creditworthiness and low risk of default. The rating is based on a solid result of the key financial figures analysis for the 2020 financial year - despite increased exceptional charges - as well as a stable revenue base, approximately two-thirds of which stems from the company's regulated activities. ESB is of strategic importance to the region and is supported by a solid legal framework on both sides of the Irish border (in ROI and NI). In view of the fact that the Republic of Ireland owns 96% of the company's shares, we assume that the Irish government would be willing to provide ESB with sufficient financial support, e.g. in the event of a crisis, which we take into account as favorable in the rating result, based on our rating system for state-affiliated companies. The corporate issuer rating of ESB is one notch below the sovereign rating of the Republic of Ireland (CRA: A+ / stable as of 21 October 2020). The stable outlook is mainly based on the final determination for Price Review 5 (PR5) for the period 2021-2025 published by the CRU (Commission for Regulation of Utilities) in December 2020, as well as the fact that, in 2020, ESB managed to largely the pandemic and economic effects (which were most recently responsible for the negative outlook), and reported overall stable business performance and a stable result of the key financial ratios analysis.
Creditreform Rating has confirmed the unsolicited corporate issuer rating of the Electricity Supply Board (ESB) at A, and changed the outlook from stable to negative. The decisive factors for the rating level were the strategic importance of the company for the region, which is supported by a solid legal framework on both sides of the Irish border (in ROI and NI), as well as the close proximity to the Irish state. Given the fact that the Republic of Ireland owns 95.7% of the company´s shares and based on our rating methodology for government-related companies, we assume that the Irish government would be willing to provide adequate financial support to ESB in the event of a crisis. The positive business development, solid financial figures and a comfortable liquidity situation in 2019 continued to be key influencing factors. The negative outlook is mainly due to the pandemic and economic effects, which have a significant impact on the Group's business and earnings development in the current 2020 financial year. In addition, uncertainties regarding Brexit and a lower permissible return on the regulated network business for the next regulation period could weaken the profitability of the group in the coming financial year.
Creditreform Rating has carried out an unsolicited rating of Electricity Supply Board (ESB). The rating has been set to A with stable outlook.