S&P shifts Unacem view to stable

S&P said it revised Union Andina de Cementos SAA’s outlook to stable from negative and affirmed its BB rating.

“Thanks to stronger-than-expected cement demand in Unacem's key markets, the company's sales and EBITDA have been rebounding since the second quarter of 2020. This, coupled with an efficient working capital management and relatively low capital expenditures and dividend distributions, have caused Unacem's key credit metrics to improve,” S&P said in a press release.

“We expect cement demand to remain robust thanks to the rising informal housing in Latin America and the upswing in the U.S. construction industry,” the agency added.

The outlook mirrors the view that Unacem will continue lowering its debt load in the next 12 months through top-line and EBITDA growth, coupled with limited financing needs. The agency said this should lead to net debt to EBITDA trending towards 3x and discretionary cash flow to debt of 5%-10%.

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