Fitch changes GEA view

Fitch Ratings said it revised GEA AG’s outlook to negative from stable.

The long-term issuer default rating and senior unsecured rating were affirmed at BBB and its short-term issuer default rating at F2.

The agency said the negative outlook is driven by weak cash generation due to operational issues and shareholder-friendly cash outflows.

“In particular, we expect free cash flow (FCF) and funds from operations (FFO) margins to remain under pressure in 2018 and 2019, including an FFO margin below 8% and an FCF margin below 2%, levels that are not commensurate with a BBB rating median,” Fitch said in a news release.

The agency said it forecasts that both metrics should normalize once GEA's restructuring is completed towards 2020 but ongoing management change creates uncertainty regarding GEA's future capital allocation policy and strategic long-term decisions.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.