Fitch Ratings has affirmed Sri Lanka-based conglomerate Richard Pieris & Company PLC’s (RICH) National Long-Term rating at ‘A(lka)’ with a stable outlook. Fitch has also affirmed the National rating on RICH’s outstanding senior unsecured debentures at ‘A (lka)’.
The affirmation of RICH’s ratings reflects our view that the improvement in the group’s adjusted net leverage was offset by the underperformance in its tyre business and some segments in the plastics sector over the last 18 months, and the risks around their recovery prospects over the medium term, limiting any positive rating action. RICH’s rating also reflects the group’s diversified cash flows, market leadership in several of its segments, and the company’s well-established operating history. Fitch Ratings also expects the company to increase capex in the next two years in a bid to expand production capacity in the retail, rubber and palm oil segments.
“We expect store expansion and a shift in consumer preference towards hypermarkets and supermarkets to lead to double-digit revenue growth for the company’s retail segment in the medium term.
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