S&P revises GCC’s outlook to stable, Mexico

S&P revises GCC’s outlook to stable, Mexico
Published: 12 September 2013


Standard & Poor's has affirmed its B-rating for Mexico-based producer Grupo Cementos de Chihuahua (GCC) and has revised the outlook from positive to stable.

The rating reflects GCC's "aggressive financial risk profile and weak business risk profile" and is constrained by the company's geographic concentration, limited scale and less than adequate liquidity.

The company's operations were affected by a longer than expected winter in the US during 1H13 that "limited construction activities in that country and therefore, volume sales of cement and concrete."
The rating is however supported by GCC's "leading position in regional markets, efficient vertical integration and conservative financial policy," stated the report.

While GCC is expected to recover during 2H13, "we estimate that economic conditions in Mexico and the US will constrain volume growth and will continue to pressure profitability measures," concluded the report.