Moody’s lifts GS Caltex view to positive

Moody's Investors Service said it changed GS Caltex Corp.'s outlook to positive from stable and affirmed its Baa3 senior unsecured ratings.

The outlook change reflects expectations that the company's financial profile will improve significantly in 2015 and will remain strong over the next few years, driven by a gradual decline in debt, improvement in earnings and supportive industry fundamentals, Moody’s said.

The debt reduction will be driven by GS Caltex's lower capital expenditure and working capital surplus stemming from lower crude oil prices, the agency said.

The company’s underlying credit strength factors in the company's strong market position as one of the major oil refiners in Korea, as well as its diversification into the petrochemical and lubricants segments, Moody’s said.

These strengths are counterbalanced by its high exposure to the inherently cyclical market conditions, which leads to a significant volatility in its operating results, the agency added.

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