Fitch revises Grupo Elektra view to negative

Fitch Ratings said it changed the outlook to negative from stable and affirmed Grupo Elektra, SAB de CV's long-term foreign- and local-currency issuer default ratings at BB+.

“The revision of the outlook to negative reflects the impact of the coronavirus pandemic and related disruptions on the non-food retail sector and the expected downturn in discretionary spending that could extend into 2021. Fitch estimates Elektra's consolidated gross adjusted leverage to increase close to 4x by YE 2020 from 2.5x in 2019, mainly as a result of lower revenues in the retail business and lower profitability margins driven by higher non-performing loans (NPLs) from the financial business. Consolidated adjusted leverage is expected to recover to levels below 2.5x during 2022 assuming a gradual and sustained revenue and profitability recovery,” Fitch said in a press release.

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