S&P Global Ratings has downgraded PPC’s credit score rating because of the cement maker’s “weaker earnings and debt-reduction possibilities.”
The rating company decreased its lengthy- and short-time period credit score ratings on PPC to zaBBB-/zaA-3 from zaA-/zaA-2.
“The downgrade follows weaker-than-anticipated profitability in PPC’s SA enterprise coupled with ongoing macro-monetary and forex regime uncertainty in Zimbabwe,” S&P said.
The organization’s debt-to-profits ratio is predicted to boom, and PPC might end up more reliant on shorter-term working capital centers to meet upcoming debt maturity obligations, the employer said.
PPC said in advance in March it is thinking about promoting off non-middle belongings. Likewise, it is searching for options to repatriate the price range caught in Zimbabwe, which is tormented by a liquidity crisis. Its coins balance in that market decreased to $60m (R865m) due to a debt charge on the cease of February.
S&P stated that because of a declining call for an accelerated opposition in SA, PPC’s debt-reduction prospects in its home market had been “dampened,” and the institution’s margins in SA could fall inside the monetary yr to quit-March.
S&P said, “Additionally, we do not forget that macro-monetary and currency regime uncertainty in Zimbabwe will have intense bad implications for PPC’s Zimbabwe commercial enterprise in the short time period, from a buying and selling and monetary reporting angle.”