the
Casino: Fitch threatens to place the note group in the category “speculative”
(development)
Paris (awp/afp) – Despite the decline in its debt, the Casino has not managed to reassure completely the rating agency Fitch, which has confirmed the note by the group, but combining it with a perspective of evolution in the negative, pointing out the uncertainties in France and Brazil, the countries in which it has refocused the distributor.
Fitch has lowered on Wednesday the outlook of the Casino from “stable” to “negative”, hinting at a possible degradation of the note of the group within two years.
This comes a few months after Standard and Poor’s (SP) lowered by one notch the rating of the French brand, changing it in the category of speculative, to “BB+”.
For the time being, Fitch has confirmed the rating of long-term debt of the French distributor, to “BBB-”.
The agency welcomes in particular the simplification of the group structure and the actions undertaken by the Casino to reduce its debt, consisting of to dispose of its operations in Asia and cut the homes of losses in Brazil.
The group of Jean-Charles Naouri has resold this year its activities in Thailand and Vietnam for € 4.2 billion. This money has been used to reduce the group’s debt.
at the end of June, the consolidated net debt of Casino has as well been reduced to 6.34 billion euros, down from two billion compared to a year earlier. The debt of the French operations has been divided by two, to 4.02 billion.
The debt of Casino had been harshly criticized by the american investor controversial Muddy Waters, via notes, incendiary, who had strongly pushed the stock price of Casino the end of 2015 and early 2016.
on Wednesday, the title Casino had an increase of 1.07% on the Paris stock Exchange at mid-day, at 46,44€. Since the beginning of the year, he has earned nearly 10%.
Fitch warns, however, that the margin of maneuver of the group to continue to reduce its debt may be reduced, the bulk of the disposals that have already been made.
in addition, the agency highlights the many uncertainties that are now weighing on the group, because of its focus on the France and Brazil, two markets where the prospects for profit remain questionable in a context of economic instability.
- future profitability is in question -
“The positive impact of the simplification of the structure of the group is offset by the negative impact that could have now low geographical diversification of the profile of the Casino and its greater exposure to strong competition in a more limited number of countries”, she said.
Fitch tip including the risks that persist in the brazilian market, in recession for over a year and the recovery could take longer than expected.
the Casino has, however, highlighted during its quarterly results in mid-October, a sequential improvement of its performance in this country, believing that the brazilian market was “stabilizing”.
The food sales of the group in Brazil are thus again become positive over the period, representing an increase of 13.2% on an organic basis, however at the cost of important promotions.
other side of the coin, the focus on the food and Casino was announced at the end of November wanting to sell its stake in Viavarejo, its brazilian subsidiary electronic products and furniture – could reduce the group’s profitability in the coming years.
The margins on the food are, in fact, traditionally less important than those of non-food products, and a significant part of the activity of brazilian Casino is concentrated in formats to discount (cash and carry, hypermarkets), the less cost-effective.
Fitch also believes that the growth in France should, of course, improve in fiscal 2016, but that the profits hexagonal group could remain low in a context of strong competition and price war.
in The third quarter, sales of Casino in France were down 1.1% in the data published.
The cost-effectiveness, a long time leaded by strong investment in price cuts in the hypermarket and the shops, Leader Price, has, however, revived in the first half. This has enabled Casino to confirm mid-October its objective of a current operating income annual $ 500 million in the Hexagon.
the Casino has not, however, given perspective on the entire group. According to Fitch, the Ebitda margin of the distributor could fall to 4.7% this year, compared with 5.1% in 2015.
afp/pr
(AWP / 14.12.2016 14h53)
No comments:
Post a Comment