S&P shifts Simpar view to positive

S&P said it revised the outlook on Simpar SA to positive from stable, and affirmed its BB- global scale and brAA+ national scale ratings. The agency also affirmed the issue-level ratings on the group at BB- and brAA+, while the 4 recovery rating on them remains unchanged.

The agency said it forecasts Simpar will deliver revenue growth above 40% in 2021, organically and through acquisitions, and expects this trend to continue, along with broadening business diversification.

“Although we expect Brazil's economy to worsen in 2022, because of high inflation, higher interest rates and limited economic growth, we forecast Simpar to post another year of solid revenue and EBITDA growth, above 50%, as it consolidates acquired assets and thanks to a solid contracted backlog,” the agency said in a press release.

The outlook reflects the possibility of an upgrade in the next 12-18 months if Simpar continues to gain scale and diversification while sustaining adequate profitability with EBIT margin of about or above 20% and EBIT interest coverage close to 2x,”S&P said.

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