S&P moves Elementia view to stable

S&P said it changed Elementia SAB de CV’s outlook to stable from negative and affirmed its BB- issuer rating.

“In our view, downside risks on Elementia's credit profile have dissipated due to stronger-than-expected demand for building materials in the company's key markets. In the 12 months ended March 2021, Elementia's revenues grew close to 13% against the same period last year. This was mostly driven by double-digit sales growth across most units, largely explained by higher volumes and better prices in its metals division. Cement sales in Mexico and the U.S. grew about 20%-25%, building systems revenue grew close to 10%, and metals about 5%,” S&P said in a press release.

For the next 12 months, the agency said it sees Elementia's consolidated revenues growing in the 5%-10% range and its EBITDA margin to trend toward 15%-16% and free operating cash flow to be within Ps. 1 billion-Ps. 1.5billion.

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