Moody's raises Saipem

Moody's Ratings said it upgraded Saipem SpA's long-term corporate family rating to Ba2 from Ba3 and probability of default rating to Ba2-PD from Ba3-PD. Concurrently, the rating agency upgraded to Ba2 from Ba3 the backed senior unsecured debts and to (P)Ba2 from (P)Ba3 the backed senior unsecured euro medium-term note program ratings issued by Saipem Finance International BV, the financing subsidiary of the company.

The upgrade reflects Saipem's better operating performance translating into Moody's adjusted EBITDA margins hitting around 8% in 2023 up from 5.3% in 2022 contributing alongside revenue growth to the reduction of the company's Moody's adjusted gross debt/EBITDA ratio to 3.4x by end of 2023 from 7.5x in the previous year, the agency said.

“Operating performance improvements were supported by strong demand for Saipem's services in combination with loss-making contracts, especially in offshore wind, being progressively completed.

“For the next 12-18 months, Moody's Ratings expects Saipem's EBITDA margins to reach low double digits as an increasing share of work from newer contacts with a higher margin profile will be executed and reduce the company's debt/EBITDA ratio towards 2.5x over the same period,” the agency said in a press release.

The outlook on both entities remains positive.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.