S&P trims BRF to BB

S&P said it lowered its global scale issuer credit rating on BRF SA to BB from BB+. The outlook remains negative.

In addition, S&P affirmed its brAAA national scale issuer credit rating and revised the outlook on it to negative from stable. S&P also lowered the issue-level ratings on BRF, BRF GmbH and BFF International Ltd. to BB from BB+ and kept the recovery rating of 3 (50%-70%, rounded 60%) unchanged.

BRF has faced consecutive unfavorable events that prevented it from improving its credit metrics in the past quarter, S&P said in a news release.

“Most recently, EU's ban on poultry protein exports from Brazil and the truck drivers' strike in that country, leading to significant one-off costs, further weakened the company's credit metrics, such as debt to EBITDA to 6.0x in the second quarter of 2018, deviating from the target of close to 4x by year-end.

“These events, coupled with management's inability to timely adjust its volume produced, redirect its volumes destined for EU to another profitable market, and adjust prices according to grain price increases, have heightened the volatility and vulnerability of BRF's margins,” S&P said in a news release.

© 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.