Moody's upgrades Snow Milk to Ba2

Moody's Investors Service said it upgraded Snow Brand Milk Products Co., Ltd.'s senior unsecured debt ratings to Ba2 from Ba3.

The outlook is positive.

The upgrade reflects the agency's view that Snow Brand's profitability and cash flow generation will continue to stabilize and improve as a result of its ongoing rationalization efforts. The ratings continue to reflect the subordination of the senior unsecured bonds to the company's secured bank debt.

Moody's said that Snow Brand underwent a significant restructuring from May 2002 until September 2005 by focusing on core businesses and spinning off its commercial milk company, which brought around a recovery of profitability and financial leverage. By maintaining its leading market positions in its core and relatively high-profit products such as butter, margarine and cheese and keeping selling, general and administrative costs moderate, the company steadily improved its consolidated operating margin to 3.3% in the third quarter of 2006 from 1.2% in the same period of 2004. The company has also improved its capital structure through debt reduction and various other measures.

Snow Brand's ratings continue to incorporate the challenges that the company may face over the medium term, the agency said, such as achieving sustainable sales growth and strengthening its brand equity by launching higher-value-added products.

© 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.