Fitch Affirms Artel Electronics at 'B'; Outlook Negative

Tashkent, Uzbekistan (UzDaily.com) — International rating agency Fitch Ratings has affirmed the long-term issuer default rating of Artel Electronics LLC at 'B'. The outlook on the rating has been maintained at 'Negative', according to the agency's release dated 18 June 2026.

Fitch notes that the negative outlook reflects an expected decline in demand and profitability for the company in 2026 against the backdrop of a difficult environment in the home appliances market and increased competition in its key areas of activity.

According to the agency's estimates, Artel Electronics faces a continuous decline in revenue, which is expected to contract by approximately 2% in 2026. The main pressure is linked to high competition in the domestic market of Uzbekistan, which generates about 82% of the company's revenue, as well as price pressure from foreign manufacturers and sensitivity to macroeconomic and currency risks.

Fitch also notes that market liberalization and ongoing reforms in Uzbekistan are intensifying the competitive environment, which has already led to a decline in the company's market share.

In the medium term, a moderate decline in the EBITDA margin is expected during the 2026–2029 period. Price competition and a potential increase in the cost of raw materials, including plastic, amid global risks in energy and supply chains are cited as pressuring factors.

According to the Fitch forecast, the debt leverage ratio (EBITDA leverage) will rise to 3.6x in 2026 compared to 3.1x a year earlier, after which it may decrease to 3.1x by 2029. The increase in the ratio is explained by a decline in profitability while maintaining the debt load.

At the same time, the agency notes positive factors, including the recovery of a positive free cash flow, improved working capital management, and a reduction in capital expenditures to a level of about 3% of revenue.

Free cash flow is expected to remain positive at an average of about 0.8% until 2029.

Artel Electronics maintains a strong position in the domestic home appliances market of Uzbekistan, as well as an advanced manufacturing and distribution network. The company continues its cooperation with a number of brands, including Shivaki.

However, Fitch points to the company's limited geographical diversification and high dependence on the domestic market, making it more vulnerable compared to international competitors such as Arcelik and Whirlpool.

The 'B' rating, according to Fitch's assessment, reflects an average credit profile for the company amid continuing pressure on profitability and limited business diversification.