I. STATEMENT ON RATING
Slovak rating agency assigns the following rating to the issues MATADOR 03 and MATADOR 04:
| Long-term crown rating | BBB+ (stable outlook)
|
| Short-term outlook | S2
|
In the category of transactions in Slovak crowns, the assigned long-term rating of BBB+ (stable outlook) is just 1 grade below the rating of the State (A - stable outlook). The short-term rating of the issues MATADOR 03 and MATADOR 04 is S2, which is the best possible short-term rating for entities assigned a long-term rating of BBB+.
Description of issues:
| Name of issue: | MATADOR 03 | MATADOR 04 |
| Date of admission: | 24.1.2002 | 24.1.2002 |
| ISIN: | SK 4120002981 | SK 4120002973 |
| Rated value: | 10 000,- SKK | 100 000,- SKK |
| Number of securities in the issue: | 25 000 | 3 000 |
| Date of issue: | 12.12.2001 (series 01) | 12.12.2001 (series 01) |
| Maturity date: | 12.6.2006 | 12.6.2007 |
| Floating interest rate: | 6-M BRIBOR + 1,8 % | 6-M BRIBOR + 1,9 % |
| Frequence of coupon pay-out: | 6 months | 6 months |
Characteristics of issuer:
| Issuer: | Matador, a.s. |
| Identification number: | 00 152 820 |
| Registered office: | Terézie Vansovej 1054, Púchov 020 01 |
| Legal form: | joint stock company |
| Date of establishment: | 01.07.1990 |
Justification:
- Strategic planning once more proves to be the strength of the company also in this rated period, as the company with awareness of development of the global market suitably times the development of its production activities, whereby the transition to more sophisticated manufacturing remains a priority. The possibility of boosting production with greater added value already has stable support from its own R&D base. Good forecasting of market development pursuant to High Performance Tyres and investment in these products appears correct in terms of the current perspective of sector development.
- Slovak Rating Agency positively assesses the continuity in the process of restructuring of the company's activities with the aim of concentrating on core business. Some of the activities initially carried out by the company are now secured by outsourcing, while the volume of services procured externally is projected to rise in future. The restructuring process also affects stakes held by the company, with the endeavour to create a group of companies with complementary operations.
- By the creation of an internal auditing department, the company completed one of the stages for the creation of a control system. The introduction of the information system mySAP.com provides effective technical support for control activities.
- Qualitative progress came concerning the system of receivables management and in the management of counterparty risk. The company applies a more sophisticated system of assessing the risk of business partners and territories it operates on with the aim of eliminating the risk of payment default. The use of safer payment instruments in combination with insurance products creates more suitable conditions also for the refinancing of the company.
- The agency regards the economic results of the company as stable with preservation of the positive trend in 2003, especially with regard to sales revenues, operating results, and profitability upon a slight drop in debts. In 2002 the company generated sales in excess of SKK 9 billion, which is an increase of 6% y/y, an after-tax profit of SKK 181.3 million and operating profit of around 7%.
- The sector in which the company undertakes business is marked by a high level of competition with pressure for continual innovation of technologies and a reduction in production costs, with the trend of shifting production to areas with lower costs. Considering the current development of the automobile industry, to which the manufacture of tyres is directly linked and the development of which cannot be classed as experiencing growth, we see a possible risk of market saturation. One of the possibilities for eliminating negative impacts of development of the automobile industry is to focus on the sale of tyres that are not primary. The company is interested in expanding its own sales network both at home and abroad.
- This year the company successfully retained its certificate ISO 14001, 1996 - application of system of environmental management. The company devotes a lot of attention to environmental issues.
Please don't hesitate to address your questions to autner@slovakrating.sk, or call +421 2 5464 5151.
Slovak Rating Agency
Bratislava, 29 October 2003