S&P affirms Jalles Machado

S&P said it affirmed its BB- global scale and brAA+ national scale issuer credit ratings on Jalles Machado SA.

The outlook is stable.

The affirmation reflects an expectation that Jalles will be able to operate close to full capacity in fiscal 2019, diluting its fixed costs, after recovering from the drought that damaged its plantations in fiscal 2017, the agency said.

In addition, the still remunerative ethanol prices, the depreciation of the Brazilian real, Jalles' production flexibility and its diversified portfolio help offset the weak sugar prices, enabling Jalles to gradually increase free operating cash flow in the next few years, S&P added.

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