Moody’s upgrades credit rating of Azerbaijan Railways

The international rating agency Moody’s has upgraded the long-term Corporate Family Rating (CFR) of Azerbaijan Railways CJSC (ADY) from B1 to Ba3, Report informs, citing ADY.

Positive developments in passenger transportation, safety, and sustainable development during ADY’s operations in 2024 played a key role in Moody’s decision to raise the company’s credit rating.

Moody’s report highlights the stable year-over-year growth in ADY’s revenues, improvements in financial and economic indicators, increased freight volumes—particularly in transit transportation—and the existence of national and railway goals to expand these volumes. Additionally, the report emphasizes ADY’s special importance in the country’s socio-economic development. It also notes that, amid rising revenues, ADY’s financial ratios are expected to improve significantly in 2024–2025.

Other key reasons for the rating upgrade include a significant reduction in ADY’s debt, improved credit indicators and credit profile, and the establishment of a solid foundation for the company’s continued development.

The report also mentions that to enhance competitiveness and achieve potential growth, ADY has undertaken serious reforms and implemented investment programs that have led to the modernization of both infrastructure and rolling stock. Among the notable developments is the completion of the Baku–Tbilisi–Kars railway modernization project, which increased this route's freight capacity from 1 million to 5 million tons per year.

According to the report, improvements in financial and liquidity indicators will fetch new opportunities to further increase ADY’s revenues in the future through new investment projects, thereby ensuring sustainable development. The improvement in liquidity indicators ensures ADY's evading difficulties to fulfill its financial obligations.

The rating upgrade enhances ADY’s financial credibility and reflects stable profitability. This enables banks and investors to offer loans to the company at lower interest rates.

The improved rating also sends a positive signal to suppliers and business customers in terms of financial stability and payment capacity, potentially paving the way for more favorable cooperation terms.

Furthermore, a higher credit rating facilitates more efficient operations for ADY, strengthens its public reputation and international image, and enables the company to participate more actively in international projects and collaborations, as well as to form strategic partnerships.

As a result of the upgraded credit rating, the expansion of ADY’s financial capacity, the improvement of operational efficiency, and the strengthening of its international reputation will contribute to consolidating Azerbaijan’s position as a regional transport and logistics hub.