Moody's Assigns Evraz Ba1 Corporate Family Rating With Stable Outlook

LONDON (Alliance News) - Moody's Investors Service on Friday said it has assigned a Ba1 corporate ...

Alliance News 15 March, 2019 | 2:56PM
Email Form

LONDON (Alliance News) - Moody's Investors Service on Friday said it has assigned a Ba1 corporate family rating to Evraz PLC with a stable outlook.

Moody's said the rating reflects its expectation that the FTSE 100-listed steelmaker will continue to reduce its debt and generate sustainable positive post-dividend free cash flow. The ratings agency also noted that Evraz has low cash costs of coking coal and iron ore production and good product, operational and geographical diversification.

The ratings agency said that Evraz recently saw the sluggish demand for steel in the Russian construction sector, which is the major consumer of Evraz's steel products. Moody's said it expect this demand to improve over the next 12 to 18 months, supported by state initiatives to develop infrastructure and boost residential construction.

Moody's said that when assigning ratings to Evraz, it took into account the overall negative effect of the 25% steel import tariff, imposed by the US in March last year and Canada in October 2018.

Meanwhile, the stable outlook reflects Evraz's solid positioning in the current rating category, despite volatility in steel, coking coal and vanadium prices and generous dividend payouts.

Looking ahead, Moody's said the steelmaker's ratings could be upgraded if it continues to pursue conservative liquidity management and maintains healthy liquidity.

A downgrade is also possible, Moody's noted, if the company's post-dividend free cash flow turns negative on a sustained basis.

Evraz shares were trading marginally lower on Friday at 620.80 pence each.

By Evelina Grecenko; evelinagrecenko@alliancenews.com

Copyright 2019 Alliance News Limited. All Rights Reserved.

Email Form
Securities Mentioned in Article
Security Name Price Change (%) Morningstar
Rating
EVRAZ PLC 594.80 GBX 0.07 -
About Author Alliance News

Alliance News provides Morningstar with continuously updating coverage of news affecting listed companies.

Audience Confirmation


By clicking 'accept' I acknowledge that this website uses cookies and other technologies to tailor my experience and understand how I and other visitors use our site. See 'Cookie Consent' for more detail.

  • Other Morningstar Websites