Brazilian metals company Votorantim had its outlook changed to stable by credit rating agency Moody’s on a diversified business portfolio in metals, cement, steel and pulp, which benefits from different end-market dynamics and mitigates the effects of cyclicality in any particular industry.
One of the largest Brazilian conglomerates, Votorantim “benefits from leading market positions in virtually all of its operating segments and has a growing exposure to the construction market,” according to Moody’s.
Among the factors that could impact Votorantim’s ratings negatively is the company’s challenging operations environment for its cement business as well as the company’s leveraged capital structure when compared to other companies rated at the same level.
Moody’s said it expects market conditions at the nation’s cement market to be “challenging”, but noted Votorantim is continuing its current expansion plans towards its cement business, mostly in Brazil, as well as in the mining segment, especially at Milpo in Peru.
According to Moody’s, Votorantim’s metals business generated about 31 percent of the company’s Ebitda.