Moodys has reaffirmed Usiminas credit rating, highlighting the steel giants robust position in Brazils market.The agency maintained the Ba2 corporate rating for Usiminas and its $750 million senior unsecured notes due in 2026.
Usiminas solid standing in Brazils flat steel market underpins this rating decision.The companys ability to swiftly adjust operations to market conditions has impressed Moodys analysts.
They noted Usiminas consistent credit metrics and liquidity across economic cycles.The steel producers enhanced financial flexibility has allowed it to weather volatility in key markets.
Moodys praised Usiminas for avoiding cash burn and maintaining covenant compliance during challenging times.Usiminas Gains Most from Steel Trade Protection in Brazil.
(Photo Internet reproduction)This performance has reduced potential liquidity risks in difficult operating environments.
As of June 2024, Usiminas boasted a strong cash position of R$5.6 billion ($1 billion).This sum comfortably covers the companys total reported debt by 0.9 times.
Moodys also noted Usiminas favorable debt amortization schedule, with no maturities until 2026.The agency believes Usiminas normalized annual cash flow sufficiently covers non-discretionary expenses.These include maintenance capital expenditures of about R$800 million ($143 million) and net interest payments of roughly R$200 million ($35 million).
Dividend payments typically remain at the legal minimum of 25% of net income.Usiminas Secures Stable Credit Rating: Moodys Affirms Financial StrengthMoodys expects Usiminas to generate positive free cash flow despite recent steel market weakness.The companys 2024 capital expenditure is projected between R$1.4 billion ($250 million) and R$1.9 billion ($340 million).This financial prudence supports Usiminas credit quality during the ongoing crisis.
The steel producers commitment to financial discipline is evident in its strong cash position.Moodys anticipates Usiminas will maintain a conservative approach to leverage and liquidity.
Any future expansion investments are expected to align with internal cash generation.Usiminas ability to navigate market challenges while maintaining financial stability has impressed Moodys.The stable outlook reflects confidence in the companys continued resilience and strategic financial management in Brazils dynamic steel industry.Usiminas Secures Stable Credit Rating: Moodys Affirms Financial Strength