Moody’s lowers Hitachi Construction to negative

Moody’s Investors Service said it affirmed Hitachi Construction Machinery Co., Ltd.’s A3 issuer rating.

Moody’s also said it revised the outlook to negative from stable.

The outlook change principally reflects the difficult operating environment now prevailing for Hitachi Construction, including weakened levels of demand for construction machinery in China and of sales of its mining machinery globally, the agency said.

The company’s leverage also is high and will remain so in the absence of material restructuring efforts and significant improvement in profitability given its current debt load, Moody’s said.

Although the company’s restructuring initiative will lead to some degree of improvements for its cost base, ongoing downward pressure on demand and pricing is likely to keep its financial metrics weak, the agency said.

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