Moody's downgrades E-Mart

Moody's Investors Service said it downgraded E-Mart Co. Ltd.'s issuer rating to Baa1 from A3.

The outlook is negative.

The downgrade primarily reflects E-Mart's weaker-than-expected financial profile in 2012, Moody's said, and an expectation that its key credit metrics will be weak for the A3 rating over the next two years given the challenging retail operating environment in Korea.

E-Mart's consolidated and unadjusted operating income fell about 9% in 2012, compared with its pro forma results in 2011, according to Moody's estimates.

The decline was driven by negative sales growth in the company's domestic hypermarket business due to softening in consumer spending, the agency said, and because of regulations that were introduced to help protect smaller retailers.

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