S&P lowers E-Mart view to negative

S&P said it revised the outlook on E-Mart Inc. to negative from stable.

The agency also said it affirmed the company's BBB long-term issuer credit rating.

The company's profitability is expected to remain weak in 2019 to 2020.

Although the agency said it does not expect meaningful earnings contribution from the company's new businesses in the short term, its hypermarket business will face performance pressure from weakening consumption and shifting consumer spending pattern.

The company also is expected to substantially increase investments for business diversification purposes, resulting in growth in debt, S&P said.

The negative outlook reflects a view that weakening operating performance and rising debt could lead credit metrics to deteriorate beyond levels commensurate with the current rating, the agency said.

S&P also said it expects continued weakening in E-Mart's profitability through 2020 due to difficulties in its mainstay hypermarket business.

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