Fitch: High Refinancing Risks Amid Positive Price Momentum for Latin American Sugar & Ethanol
OREANDA-NEWS. Fitch Ratings has published a new report on the 2016 outlook for the Latin American sugar and ethanol sector.
Fitch expects systemic risk in the Brazilian S&E sector to remain high as both the bond and bank markets are avoiding increasing exposure to the sector. While industry fundamentals are supporting the recent rise in prices, Fitch expects the majority of Brazilian S&E companies to report negative free cash flow (FCF) in 2016 due to increases in salaries, logistics costs and interest rates. The required investments in cane fields and industrial assets will also pressure the FCF of most companies, with a negative impact on leverage. Higher crushed volumes, rising ethanol prices and the companies' capacity to lock in sugar prices in BRL terms at the currently attractive levels will be important over the course of the next season.
Комментарии