Fitch revises KUO outlook to stable

Fitch Ratings said it changed the outlook for Grupo KUO, SAB de CV to stable from positive and affirmed its BB long-term foreign- and local-currency issuer default ratings and unsecured senior notes. In addition, Fitch affirmed KUO's national scale long-term rating at A(mex).

“The outlook revision incorporates Fitch's view that KUO's operations will continue to be pressured by high raw material prices in a high inflationary environment, while demand and reference prices in the chemical sector tend to normalize,” the agency said in a press release.

Fitch noted volatility in raw materials had a negative effect, particularly in the pork business. In addition, the cost of corn and soybean paste was driven up by the Ukraine-Russian war and the climatic effects related to droughts.

“Despite adverse market conditions and price increases, volumes were resilient in KUO's different industries,” the agency said.

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