{"id":8089,"date":"2012-02-18T02:11:04","date_gmt":"2012-02-18T00:11:04","guid":{"rendered":"http:\/\/www.myza.co.za\/02\/text-fitch-affirms-barloworld-at-azafoutlook-stable\/"},"modified":"2012-02-18T02:11:04","modified_gmt":"2012-02-18T00:11:04","slug":"text-fitch-affirms-barloworld-at-azafoutlook-stable","status":"publish","type":"post","link":"https:\/\/www.myza.co.za\/press\/text-fitch-affirms-barloworld-at-azafoutlook-stable\/","title":{"rendered":"TEXT-Fitch affirms Barloworld at ‘A+(zaf)’;outlook stable"},"content":{"rendered":"

\t\t<\/span><\/p>\n

(The following statement was released by the rating agency)<\/span><\/p>\n

<\/span><\/p>\n

Feb 17 – Fitch Ratings has affirmed Barloworld Ltd’s (Barloworld) National
\nLong-term rating at ‘A+(zaf)’ and domestic medium term note (DMTN) senior unsecured issue rating
\nat ‘A+(zaf)’.The National Short-term rating has also been affirmed at ‘F1(zaf)’.The Outlook on
\nthe National Long-term rating is Stable.<\/p>\n

<\/span><\/p>\n

The affirmations are supported by Barloworld’s credit metrics, which are
\nunderpinned by the positive recovery in the operating performance from core
\nbusinesses in southern Africa. The order book for mining equipment in southern
\nAfrica has rebounded sharply to over ZAR6bn in Q112 and is at levels markedly
\nabove the low point reached in 2009 (ZAR1.5bn equipment order book for southern
\nAfrica at the height of the previous economic downturn). The Stable Outlook
\nreflects Fitch’s expectation that secured order book levels in southern Africa
\nshould benefit the equipment operations in the next 18-24 months.<\/p>\n

<\/span><\/p>\n

However Fitch remains cautious about demand for international and domestic
\ndemand for construction equipment, which is likely to remain sluggish. The
\nagency also considers that the group’s operational performance remains
\nsusceptible to cyclical end-market industries such as mining and construction,
\nwhich constrains Barloworld’s current ratings.<\/p>\n

<\/span><\/p>\n

Fitch anticipates a peak in Barloworld’s funds from operations (FFO) adjusted
\nnet leverage metric to increase close to 2.5-2.7x in FY12 following increased
\nworking capital requirements to fund inventory levels and the potential
\nacquisition costs associated with the Bucyrus equipment distribution rights. In
\nthis scenario, Fitch assumes potential divestures in 2012\/13 could strengthen
\nthe group’s cash position and provide some de-leveraging ability.<\/p>\n

<\/span><\/p>\n

Despite increased debt levels in 2012, Fitch expects net leverage to start
\nimproving by FY13 and to be sustained close to 2x. In FY11, Barloworld reduced
\nits net debt levels to ZAR4.4bn from ZAR5bn in FY10 and Fitch believes the
\ncurrent (FY11) leverage position offers financial flexibility to incur moderate
\ninvestment growth.<\/p>\n

<\/span><\/p>\n

Liquidity is under control supported by cash balances of ZAR2.7bn at FY11,
\navailable unutilised bank facilities of ZAR4bn in the South African operations
\nand a longer debt repayment profile. Negative rating pressure could materialise
\nif the FFO adjusted leverage metric is sustained above 2.5x with a material
\nchange in financial policy, unsuccessful asset divestures and significant
\noperating profit erosion.<\/p>\n

<\/span><\/p>\n

\n

\t\t\u00a9 Thomson Reuters 2012 All rights reserved<\/p>\n","protected":false},"excerpt":{"rendered":"

(The following statement was released by the rating agency) Feb 17 – Fitch Ratings has affirmed Barloworld Ltd’s (Barloworld) National Long-term rating at ‘A+(zaf)’ and domestic medium term note (DMTN) senior unsecured issue rating at ‘A+(zaf)’.The National Short-term rating has also been affirmed at ‘F1(zaf)’.The Outlook on the National Long-term rating is Stable. The affirmations […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_genesis_hide_title":false,"_genesis_hide_breadcrumbs":false,"_genesis_hide_singular_image":false,"_genesis_hide_footer_widgets":false,"_genesis_custom_body_class":"","_genesis_custom_post_class":"","_genesis_layout":"","ngg_post_thumbnail":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":false,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[1],"tags":[830,2370,183],"class_list":{"0":"post-8089","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-south-africa","7":"tag-news","8":"tag-reuters","9":"tag-south-africa-2","10":"entry"},"jetpack_publicize_connections":[],"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/posts\/8089","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/comments?post=8089"}],"version-history":[{"count":0,"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/posts\/8089\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/media?parent=8089"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/categories?post=8089"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/tags?post=8089"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}