Moody’s expects stable profitability, cash generation for SOCAR in 2025-2026

The State Oil Company of Azerbaijan (SOCAR) is expected to maintain stable profitability and cash generation in 2025–2026, reads a new rating statement by Moody’s on SOCAR, Report informs.

"The company's liquidity is sound. Its cash balance and deposits of 13.1 billion manats ($7.705 billion) as of year-end 2024, forecasted cash generation of around 2.3 billion manats ($1.352 billion) over 2025-26 and new debt already raised in 2025 of around 5.9 billion manats ($3.470 billion) should be sufficient to cover estimated debt maturities of 15 billion manats ($8.823 billion) and 2.2 billion manats ($1.294 billion) of M&A over this period."

SOCAR's creditworthiness also reflects its key role in Azerbaijan's oil and gas sector and its importance to the national economy, as well as its close ties with the Azerbaijani government, which has accumulated significant reserves and should be able to provide financial support to the company if needed.

"The rating action also reflects SOCAR's sound credit metrics. Its gross leverage increased to 2.9x in 2024 from 2.4x in 2023 and 1.5x in 2022, but was below 3.4x in 2021 and 5.2x average in 2018-20. Gross leverage is likely to remain below 3.0x over the next 18 months under our oil price assumptions of $67 per barrel in 2025 and $65 per barrel in 2026. RCF/net debt should also remain healthy at around 30% in 2025-26, but lower than it was in the past. Finally, debt/book capitalisation continues improving gradually towards 25% in 2026 from 35% in 2022-24 and more than 40% in 2019-21," Moody's added.