S&P lifts Klabin outlook to positive

Standard & Poor's said it revised its outlook on Klabin SA to positive from stable.

The agency said it also affirmed its BB long-term counterparty credit rating.

The rating reflects Brazil's country risk improvements and favorable economic prospects in Klabin's main market, along with the advanced stage of its significant expansion project, which provides more assurance that the company will complete the investments as promised, the agency noted.

S&P said that the rating also reflects the company's exposure to some important cost inputs such as energy, although the new expansion project will reduce this exposure, the fragmented market for corrugated boxes does not allow for pricing policies consistent with the company's leading market share and the volatile nature of the Kraftliner business.

These risks are partially offset by Klabin's competitive cost position, its increasing diversification into exports and its highly comfortable liquidity and capital structure, S&P added.

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