Scope Hamburg has confirmed the A+ issuer credit rating of Vitens N.V. The underlying factors are a combination of a low business risk profile, a moderate to slightly increased financial risk profile and a four-notch uplift for implied governmental support. The rating outlook remains stable.
The overall low business risk profile for Vitens is mainly a result of the regional monopoly position, virtually constant water consumption rates, low demand volatility, perpetual supply concessions and highly predictable cash flows. Further supportive factors include a reliable, well-established regulatory regime within the Dutch water sector, the favourable asset ownership model and long-dated protective legislation against the privatisation of drinking water services.
Moderate to slightly increased financial risks for Vitens mainly stem from the consistently high (and currently rising) debt levels and generally weak credit metrics caused by the continuously high infrastructure funding needs and the imposed profit restrictions (WACC regulation). Along with slightly increasing operating costs and rising investment volumes our expectation is that Vitens’ credit metrics will remain impacted by these factors over the medium-term. In view of the long track record of recurring, stable earnings, together with an overall low business risk profile for the Dutch drinking water sector, we generally think that Vitens is able to sustain these sector specific high long-term debt levels. The broad external funding base, sustained access to new funding, unused credit facilities, low funding costs and additional funding potential from dividend cuts or municipal loans/guarantees provides Vitens generally with a high financial flexibility.
The government-related status of Vitens results in an adjustment of the stand-alone rating by four notches, which represents our expectation for a very high likelihood of extraordinary government support in situations of financial distress. The underlying factors are a combination of Vitens’ strong link to municipalities and provinces, the very high public importance of drinking water utilities and the very high sovereign credit quality of the Netherlands.
With a share of 32 % of total connections in the Netherlands, Vitens is the largest of ten publicly owned drinking water supply companies, followed by Brabant Water (15 %), Evides (13 %) and PWN (10 %). With 2.6 million connections serving 5.7 million customers, Vitens supplies most of the central and northern part of the Netherlands through 93 production plants in the provinces of Flevoland, Friesland, Gelderland, Utrecht and Overijssel. At the end of 2019, Vitens employed 1,394 people and generated revenues totalling € 364.9 million.
Scope Hamburg GmbH (formerly Euler Hermes Rating GmbH) was founded in 2001 as an independent European rating agency focusing on issuer and issuance ratings. Scope Hamburg GmbH is registered as a credit rating agency (CRA) in accordance with Regulation (EC) No 1060/2009 of the European Parliament and Council (as amended) and is considered as an external credit assessment institution (ECAI) by the European Banking Authority (EBA). Scope Hamburg GmbH is a subsidiary of Scope Group, the leading European provider of independent credit ratings, ESG analyses and fund analyses.
Further information on this rating can be found at www.scopehamburg.com.
PR / Scope Hamburg GmbH:
Stefan Krasz – firstname.lastname@example.org
Tel.: 040 60 77 81 2 – 00
Fax: 040 60 77 81 2 – 49
© 2021 Scope Hamburg GmbH (“SHG”) and/or its licensors and affiliates. All rights reserved.
CREDIT RATINGS ISSUED BY SHG ARE SHG’S CURRENT OPINIONS OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES, AND SHG’S PUBLICATIONS MAY INCLUDE SHG’S CURRENT OPINIONS OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES. SHG DEFINES CREDIT RISK AS THE RISK THAT AN ENTITY MAY NOT MEET ITS CONTRACTUAL, FINANCIAL OBLIGATIONS AS THEY COME DUE AND, IN THE CASE OF ISSUANCE-LEVEL CREDIT RATINGS, ANY ESTIMATED FINANCIAL LOSS IN THE EVENT OF DEFAULT. CREDIT RATINGS DO NOT ADDRESS ANY OTHER RISK, INCLUDING BUT NOT LIMITED TO: LIQUIDITY RISK, MARKET VALUE RISK, OR PRICE VOLATILITY. CREDIT RATINGS AND SHG’S OPINIONS INCLUDED IN SHG’S PUBLICATIONS ARE NOT STATEMENTS OF CURRENT OR HISTORICAL FACT. CREDIT RATINGS AND SHG’S PUBLICATIONS ARE NEITHER A PROSPECTUS NOR A SUBSTITUTE FOR INFORMATION ASSEMBLED AND PRESENTED BY COMPANIES OR ISSUERS FOR INVESTORS REGARDING THE PURCHASE OF A SECURITY OR FOR ASSESSING THE CREDITWORTHINESS OF A RATED ENTITY. CREDIT RATINGS AND SHG’S PUBLICATIONS DO NOT CONSTITUTE OR PROVIDE INVESTMENT OR FINANCIAL ADVICE, AND DO NOT PROVIDE RECOMMENDATIONS TO PURCHASE, SELL, OR HOLD PARTICULAR SECURITIES. NEITHER CREDIT RATINGS NOR SHG’S PUBLICATIONS COMMENT ON THE SUITABILITY OF AN INVESTMENT FOR ANY PARTICULAR INVESTOR. SHG ISSUES ITS CREDIT RATINGS AND PUBLISHES ITS PUBLICATIONS WITH THE EXPECTATION AND UNDERSTANDING THAT EACH INVESTOR WILL, WITH DUE CARE, CONDUCT ITS OWN INDEPENDENT ANALYSES, CREDIT ASSESSMENTS AND OTHER VERIFICATIONS AND EVALUATIONS OF EACH SECURITY THAT IS UNDER CONSIDERATION FOR PURCHASE, HOLDING, OR SALE.
SHG’S CREDIT RATINGS AND SHG’S PUBLICATIONS ARE NOT INTENDED FOR USE BY RETAIL INVESTORS AND IT WOULD BE RECKLESS AND INAPPROPRIATE FOR RETAIL INVESTORS TO USE SHG’S CREDIT RATINGS OR SHG’S PUBLICATIONS WHEN MAKING AN INVESTMENT DECISION. IF IN DOUBT YOU SHOULD CONTACT YOUR FINANCIAL OR OTHER PROFESSIONAL ADVISER.
ALL INFORMATION CONTAINED HEREIN IS PROTECTED BY LAW, INCLUDING BUT NOT LIMITED TO, COPYRIGHT LAW, AND NONE OF SUCH INFORMATION MAY BE COPIED OR OTHERWISE REPRODUCED, REPACKAGED, FURTHER TRANSMITTED, TRANSFERRED, DISSEMINATED, REDISTRIBUTED OR RESOLD, OR STORED FOR SUBSEQUENT USE FOR ANY SUCH PURPOSE, IN WHOLE OR IN PART, IN ANY FORM OR MANNER OR BY ANY MEANS WHATSOEVER, BY ANY PERSON WITHOUT SHG’S PRIOR WRITTEN CONSENT.
All information contained herein is obtained by SHG from sources believed by it to be accurate and reliable. Because of the possibility of human or mechanical error as well as other factors, however, all information contained herein is provided “AS IS” without warranty of any kind. SHG adopts all necessary measures so that the information it uses in assigning a credit rating is of sufficient quality and from sources SHG considers to be reliable including, when appropriate, independent third-party sources. However, SHG is not an auditor and cannot in every instance independently verify or validate information received in the rating process or in preparing the SHG publications.
Please note that summaries of contracts, laws and other documents contained in any SHG publication, rating report or other materials cannot replace careful study of the relevant complete texts.
SHG and its directors, officers, employees, agents, representatives, licensors and suppliers disclaim liability to any person or entity for any indirect, special, consequential, or incidental losses or damages whatsoever arising from or in connection with the information contained herein or the use of or inability to use any such information, even if SHG or any of its directors, officers, employees, agents, representatives, licensors or suppliers is advised in advance of the possibility of such losses or damages, including but not limited to: (a) any loss of present or prospective profits or (b) any loss or damage arising where the relevant financial instrument is not the subject of a particular credit rating assigned by SHG. The limitations do not apply to the extent that fraud, intent or any other type of liability cannot be excluded and/or limited under applicable law.
SHG and its directors, officers, employees, agents, representatives, licensors and suppliers disclaim liability for any direct or compensatory losses or damages caused to any person or entity, on the part of, or any contingency within or beyond the control of, SHG or any of its directors, officers, employees, agents, representatives, licensors or suppliers, arising from or in connection with the information contained herein or the use of or inability to use any such information. The limitations do not apply to the extent that fraud, intent or any other type of liability cannot be excluded and/or limited under applicable law.
NO WARRANTY, EXPRESS OR IMPLIED, AS TO THE ACCURACY, TIMELINESS, COMPLETENESS, MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OF ANY SUCH RATING OR OTHER OPINION OR INFORMATION IS GIVEN OR MADE BY SHG IN ANY FORM OR MANNER WHATSOEVER.
The dissemination and use of an SHG rating report may be prohibited by law in certain jurisdictions. Any persons who come into the possession of such information should inquire about and comply with any prohibitions that may be in place. SHG assumes no liability of any kind with respect to such dissemination and use of any rating in any jurisdiction whatsoever.
Scope Hamburg GmbH