International ratings agency Moody's has announced that it has upgraded the Turkish steel producer Erdemir Group's rating to Ba2 from Ba3. The rating outlook is stable.
Moody’s said that the upgrade was prompted by ongoing improvements in Erdemir's operating performance and credit metrics in 2014 and a further reduction in leverage. The strong performance was achieved in a declining raw material and pricing environment. Erdemir managed to improve its profitability thanks to lower iron ore prices and a further improvement of its crude steel capacity utilization ratio.
The rating agency also noted that most of Erdemir's output is sold in Turkey, a country in which some segments of the economy may be challenged in 2015 even if Moody's still expects an overall GDP growth.
Additionally, the stable outlook reflects fairly favorable economic fundamentals for Turkey and Erdemir’s strong position in the flat steel market.