Fitch Ratings has affirmed Sri Lanka-based cable manufacturer Sierra Cables PLC’s (Sierra) ational Long-Term Rating at ‘BB+(lka)’ with a Stable Outlook.
Sierra’s rating reflects its exposure to cyclical end-markets such as infrastructure and construction and investments in international markets where the company has yet to establish itself.
These risks are counterbalanced to an extent by its growing domestic market share and stable EBITDA margins.
Consequently, Sierra’s revenue growth has been volatile, which is reflected in its rating.
The domestic construction sector started recovering from late 2016 on the resumption of projects that were halted in 2015/16, helping Sierra to increase its local cable revenue by 21% yoy in FY17 compared with a decline in FY16.
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