George Frangeskides, Exec-Chair at Alba Mineral Resources, discusses grades at the Clogau Gold Mine. Watch the full video here.

Less Ads, More Data, More Tools Register for FREE
Stefan Bernstein explains how the EU/Greenland critical raw materials partnership benefits GreenRoc
Stefan Bernstein explains how the EU/Greenland critical raw materials partnership benefits GreenRocView Video
Utilico Insights - Jacqueline Broers assesses why Vietnam could be the darling of Asia for investors
Utilico Insights - Jacqueline Broers assesses why Vietnam could be the darling of Asia for investorsView Video

Latest Share Chat

Moody's Changes Weir's Outlook To Negative; Warns On Ratings Downgrade

Tue, 07th Apr 2020 14:00

(Alliance News) - Moody's Investors Service on Tuesday has changed the outlook for engineering company Weir Group PLC to negative from stable, but affirmed the ratings.

The stock was trading 14% higher in London on Tuesday at 900.00 pence a share.

Moody's explained that a shift to negative outlook reflects the fact that Weir's leverage remains outside the range for its Baa3 rating for several years. The ratings agency expects this to likely remain the case for at least 2020, even without taking into account the current macro developments.

Accordingly, there is an increased risk of a downgrade, the ratings agency said.

Looking ahead, Moody's said it believes that Weir's Oil & Gas segment will come under significant further pressure in 2020 with further significant revenue drops and possibly negative earnings before interest, tax, depreciation and amortization margin.

The Minerals and ESCO segments, meanwhile, should be more resilient, Moody's noted, because they are typically less volatile from a revenue and margin perspective.

The affirmation of Weir's ratings, meanwhile, remains supported by its strong market leadership in product niches, Moody's said, good geographical diversification, high profitability in its core mining operations and solid free cash flow generation.

Moody's explained that the main constraints for the ratings are Weir's modest scale in terms of revenue and somewhat narrower product portfolio than that of similarly rated peers.

Moody's said it would consider stabilising the outlook if Weir can achieve metrics commensurate with the Baa3 rating in an appropriate time horizon.

Although unlikely in the context of the current negative outlook, Moody's said it would consider positive pressure on the rating if Weir improves its capital structure.

By Evelina Grecenko; evelinagrecenko@alliancenews.com

Copyright 2020 Alliance News Limited. All Rights Reserved.

Related Shares

More News
20 Mar 2024 08:52

LONDON BROKER RATINGS: UBS raises Halma; cuts Spirax-Sarco and Weir

(Alliance News) - The following London-listed shares received analyst recommendations Wednesday morning:

13 Mar 2024 11:41

Weir opens USD60 million high-tech foundry in China

(Alliance News) - Weir Group PLC on Wednesday announced the official opening of its new USD60.0 million foundry in Xuzhou, China.

4 Mar 2024 08:59

LONDON BROKER RATINGS: Jefferies says buy BP; UBS says buy Compass

(Alliance News) - The following London-listed shares received analyst recommendations Monday morning:

29 Feb 2024 09:36

Weir lifts dividend as annual profit and revenue surge

(Alliance News) - Weir Group PLC on Thursday reported a double-digit climb in its annual profit, and upped its full-year dividend.

29 Feb 2024 07:22

Weir Group delivers strong 2023 profits as margins beat targets

(Sharecast News) - Weir Group managed to deliver an 18% increase in adjusted profits in 2023 after beefing up margins more than expected as it pointed...

Login to your account

Don't have an account? Click here to register.

Quickpicks are a member only feature

Login to your account

Don't have an account? Click here to register.