Fitch Ratings has revised the outlook for Brazilian cement firm Votorantim Cimentos from Stable to Negative and set its global scale rating at BBB- and national scale rating at AAA(bra).
The results reflect the credit portfolio change by the controller of Votorantim Cimentos, the Votorantim group, which saw its global scale rating revised to BBB-, with a Negative outlook.
According to a report in Valor Economico this week, Fitch Ratings noted that the company’s net debt should reach BRL 9bn (EUR 2.03bn USD 2.35bn) in 2020.
This compares with BRL 7.3bn the previous year, mainly due to the depreciation of the Brazilian real, since the company has a large part of its debt in US dollars.
In terms of operations, Fitch Ratings stated that Votorantim Cimentos has a strong commercial position, occupying a leading market position.
However, demand for products is expected to drop significantly in the second half of 2020, which could extend into 2021 in Brazil and at its operations in North America.
This article first appeared in Valor Economico.