S&P downgrades PPC on weaker profit and debt-reduction prospects
S&P Global Ratings has downgraded PPC’s credit rating due to the cement maker’s “weaker profit and debt-reduction prospects”. The ratings agency lowered its long- and short-term credit ratings on PPC to zaBBB-/zaA-3 from zaA-/zaA-2. “The downgrade follows weaker-than-expected profitability in PPC’s SA business coupled with ongoing macro-economic and currency regime uncertainty in Zimbabwe,” S&P said. The group’s debt-to-earnings ratio is expected to increase, and PPC might become more reliant on shorter-term working capital facilities to meet upcoming debt maturity obligations, the agency said. PPC said earlier in March it is considering selling off non-core assets. It is also looking at options to repatriate funds stuck in Zimbabwe, which is suffering from a liquidity crisis. Its cash balance in that market had been reduced to $60m (R865m) due to a debt payment at the end of February, it said. S&P said that due to declining demand and increased competition in SA, PPC’s debt-reducti...
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