Fitch turns Embraer outlook to positive

Fitch Ratings said it revised its outlook for Embraer SA to positive from stable and affirmed its ratings for the company and the BB+ ratings on its unsecured notes sold through Embraer Netherlands Finance BV.

“The positive outlook reflects Embraer's improving production and delivery profile and growing operating cash flow generation that should benefit credit metrics. Fitch recognizes that recent supplier issues have postponed further improvement in deliveries, but expects ongoing progress to lead to operational normalization throughout 2024. Fitch forecasts Embraer's consolidated total leverage to trend down to 4x by 2024, with net leverage just around 1x,” the agency said in a press release.

Fitch noted Embraer's firm commercial aviation order backlog stood at 291 aircraft at the end of 3Q23, up from 281 in 4Q20 but still under the pre-pandemic 338 in 2019. Its financial backlog has already beaten pre-pandemic levels, with $17.8 billion at the end of 3Q23, higher than in 2019 and an improvement from $14.4 billion at year-end 2020.

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