Fitch ups West China Cement

Fitch Ratings said it upgraded West China Cement Ltd.’s long-term issuer default rating and senior unsecured rating to BB from BB-. The outlook is positive.

“The upgrade is driven by WCC's ability to maintain a strong financial profile throughout the Covid-19 pandemic in 2020. The positive outlook reflects Fitch's expectations that WCC's new capacity additions outside of its home market in Shaanxi will increase its scale and profits and reduce geographical concentration after 2021. At the same time, we expect the company to maintain low leverage,” Fitch said in a press release.

The agency said it forecasts WCC generating around CNY 3 billion of cash flow from operations in 2021 compared to CNY 2.5 billion in 2020 on stable average selling prices and margin, supported by a strong regional market position.

“We expect the company's FFO net leverage to peak in 2021 at 1.2x (2020: 1.1x) before falling below 1x in 2022 as capex tapers off,” Fitch said.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.