Fitch Ratings has affirmed Tunisian building materials group Societe des Ciments d’Enfidha (SCE) National Long term of ‘BBB(tun)’ with Stable Outlook and National Short term rating of ‘F3(tun)’ and simultaneously withdrawn the ratings.
Fitch said it is withdrawing the ratings because it no longer has sufficient information to maintain the ratings. Accordingly, Fitch will no longer provide ratings or analytical coverage for SCE.
SCE demonstrated a capacity to sustain its leading market position and growth in 2014, a challenging year, and Fitch expects this will remain the case in 2015. Local cement consumption has been rather resilient to the economic and political environment following the Tunisian revolution in 2011. However, most of the demand was driven by households and, to a lesser extent, by residential and commercial projects.
Now that the transition period is over and a new government was elected in late 2014, we expect demand to be driven increasingly by infrastructure projects, according to Fitch.
With consistently low leverage, SCE has paid back its long-term loans, and in the absence of major investments Fitch does not expect its credit metrics to change in the foreseeable future. SCE enjoys sufficient headroom for its rating, which enables it to withstand increased sector risks. FFO-adjusted net leverage stood at -0.3x at end-2014 (-0.4x at end-2013) and Fitch expects the net cash position will be sustained.