Moody's turns Ilim Timber view to positive

Moody's Investors Service said it changed Ilim Timber Continental SA's outlook to positive from stable. The agency also affirmed the B2 corporate family rating and the B2-PD probability of default rating.

“Today's rating action reflects the company's very strong operating and financial performance in 2020-21 thanks to particularly favorable industry conditions which is likely to lead to a sustainable reduction in its leverage. The rating action also factors in Moody's expectation that the company will pursue its balanced financial policy, appropriately sizing investment spending and shareholder distributions, and maintain sound liquidity, proactively managing refinancing needs,” the agency said in a press release.

Moody’s noted Ilim nearly doubled its Moody's-adjusted EBITDA to €69 million in 2020 from €36 million a year earlier and may rise steeply above €200 million in 2021 on high lumber prices.

“However, as industry conditions stabilize over the next 18 months, EBITDA is likely to return to a more sustainable level of €50 million-€60 million in 2022,” Moody’s said.

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