S&P revises E-Mart view to negative

S&P said it revised the outlook for E-Mart Inc. to negative from stable, citing weak profitability and increasing debt.

“Difficult operating conditions for the traditional retail business and slower-than-expected stabilization of new businesses will keep E-Mart's profitability low. The company's overall performance over the next 12-24 months should be broadly similar to the weak trend in 2019. E-Mart's hypermarket business, which accounts for more than 50% of total revenue and around 100% of operating income, will likely be the most hit by the tough situation,” the agency said in a press release.

In its preliminary result disclosed On Feb. 13, the company reported historical low earnings in 2019. S&P attributed the weak performance last year to continued weakening in E-Mart's offline hypermarket business and a larger operational burden from its new businesses.

S&P affirmed E-Mart’s BBB- rating.

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