Fitch assigns Titan Cement, notes BB+

Fitch Ratings said it assigned BB+ ratings to Titan Cement International SA and its senior unsecured notes issued through subsidiary Titan Global Finance plc. The recovery rating on the notes is RR4. The outlook is stable.

“The rating is underpinned by the group's leading market position in the regions it operates, a long-term record of good operating performance, an established production network and diversified customer base, moderate fluctuation of profitability through the cycle, balanced geographical diversification and a moderate ability to pass on costs to customers. Rating weaknesses are weaker diversification and market position as well as smaller scale versus peers,” Fitch said in a press release.

Fitch said it forecasts Titan’s EBITDA margin to widen to about 16% in 2023, and towards about 18% in 2025-2026, from 13.8% in 2022 when cost increases beat price rises.

The outlook “reflects expected solid operating performance, supported by stable demand for building materials and expected improvement of EBITDA and free cash flow (FCF) generation, which will provide the group with deleveraging capacity, in turn underpinning the rating,” the agency said.

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