Fitch lifts OCP view to stable

Fitch Ratings said it revised the outlook on OCP SA's long-term issuer default rating to stable from negative and the long-term issuer default rating and senior unsecured ratings at BBB-.

The outlook revision reflects the expected improvement in OCP's financial profile in 2018 on the back of the reimbursement of 20.5 billion in Moroccan Dirham in VAT arrears from the state and favorable market conditions, Fitch said.

Under base case expectations, funds from operations adjusted net leverage will be sustained to less than 3x against a 4x negative sensitivity for 2019, the agency said.

Beyond 2019, profitability and cash flow generation should be supported by positive pricing momentum and the full contribution from the four Jorf Lasfar units, Fitch said.

The ratings also consider a one-notch uplift for state support from Morocco, the agency said.

OCP's business profile is strong and underpinned by its vertical integration, competitive cost position, exceptionally large ore reserves and leading market positions, the agency said.

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