Moody's upgrades Voith

Moody's Investors Service said it upgraded the rating of Voith GmbH & Co. KGaA, assigning a long-term issuer rating of Baa3.

The outlook is stable.

The agency also said it withdrew Voith's corporate family rating of Ba1 and probability of default rating of Ba1-PD as per the agency's practice for corporations with investment-grade ratings.

Triggered by a 5% revenue growth at Voith Paper, a 40% increase in profit from operations and a 24% surge in the division's order intake, the upgrades alos acknowledge the successful completion of the restructuring of Voith Paper, which is the nucleus of the family-owned engineering group, Moody's explained.

The upgrades also balance the low net leverage of 1.4x and its strong retained cash flow coverage with some uncertainty regarding future investments and weak profitability at the group level, the agency said.

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