International credit rating agency Moody’s has announced that it has assigned a corporate credit rating of B3 to Finland-based stainless steel producer Outokumpu. The outlook on all ratings is positive.
According to Moody’s, Outokumpu's B3 rating reflects the company's high leverage and the company being free cash flow negative at the end of 2015. The positive outlook reflects Moody's expectations that Outokumpu will be able to improve its EBIT and EBITDA over the next year.
Moody’s expects that Outokumpu will turn around its financial performance achieving better cash flow protection metrics in the current year and that it will improve the profitability of its Coil Americas division, while continuing the restructuring efforts throughout the group. Moody's also believes that the restructuring programs enacted by the company over the past three years and including closure of capacity in Europe will bear fruits over the next two years. Outokumpu's underlying markets are expected to grow in 2016, albeit at a low rate of one percent to two percent in both the Europe, Middle East and Africa (EMEA) and NAFTA regions.