Tashkent, Uzbekistan (UzDaily.com) — The international credit rating agency S&P Global Ratings has revised the outlook on the credit ratings of two key state-owned companies in Uzbekistan — the Navoi Mining & Metallurgy Combinat (NGMK) and Uzbekneftegaz (UNG) — from “stable” to “positive.”

This decision followed a similar revision of Uzbekistan’s sovereign rating outlook, reflecting strengthened macroeconomic stability and a positive momentum of reforms in the country.

The S&P report highlights a high likelihood that NMMC will receive significant support from the Uzbek government, which is the company’s 100% owner.

“NGMK plays a critically important role in the country’s economy: it owns all major gold deposits and is the largest producer of this precious metal, as well as one of the leading taxpayers — in 2023, the company accounted for more than 16.7% of the state budget revenues,” the agency’s experts emphasize.

Despite strong government backing and preferential financing, S&P points to potential risks linked to economic reforms and financial requirements imposed on state enterprises.

In particular, the agency notes that under stress scenarios, the company might face additional tax and dividend obligations to the state budget.

Uzbekneftegaz also receives a high evaluation for its vital role in Uzbekistan’s economy. The company supplies about 60% of domestic gas consumption at affordable prices, supporting industry and the population. Additionally, UNG is one of the country’s largest taxpayers.

However, S&P observes that state control over the company has become less stringent and highlights the need for modernization and liberalization of the gas sector as part of ongoing reforms.

The agency forecasts a gradual decline in the company’s economic role in the long term, especially amid increasing gas imports and the planned transformation of UNG into a more competitive and independent market player.

In its statement, S&P Global Ratings notes: “The positive outlooks on NGMK and Uzbekneftegaz fully align with the revised outlook on Uzbekistan’s sovereign rating.” The agency is prepared to upgrade the companies’ ratings further if macroeconomic conditions improve and reforms continue to succeed.

At the same time, negative scenarios related to financial and operational risks could lead to stabilization or downgrade of the outlooks.

Thus, S&P Global Ratings’ decision reflects growing international investor confidence in the resilience and potential of Uzbekistan’s state enterprises and underscores the importance of ongoing economic reforms.