(Tiper Stock Exchange) – S&P Global Ratings promoted the ratings on the debt of Webuildbig Italian construction and engineering, to “BB” from “BB-” with Outlook Stable. The rating agency’s decision is supported by the improved financial performance of the group and by a risk profile of the assets that benefits from the commercial focus on lower risk countries, reads a note.
According to S&P, “the credit metrics of Webuild are significantly improved in 2022 and will improve further in 2023-2024, reflecting increased revenue and profitability and improved cash flow management. The improvement is largely due to the increase in revenues deriving from important new orders acquired; revenue increased by a substantial 26% in 2022 and we expect further growth of 13% in 2023 and 8% in 2024, significantly outpacing GDP growth. Webuild’s solid order book covers most of the revenue target for the three-year period 2023-2025. The improvement in credit parameters also reflects a progressive growth in the EBITDA margin. Margins benefit from the contribution of recently acquired contracts, as well as some contractual changes”.
Analysts believe that “the improvement of Webuild’s financial risk profile is sustainable, as driven by the company’s priority of reducing risk by increasing its presence in low-risk countries and improving profitability and working capital management, also through a growing reliance on contractual standards that allow easier cost transfer as demonstrated since the recent contract revision of the Snowy 2.0 project. Webuild is increasing the percentage of backlog contracts that contain solutions to address high raw material costs.”
S&P highlights that “Webuild’s business risk profile benefits from the company’s strong experience in executing complex construction projects. The technological and engineering expertise of the group represents a supporting factor that allows the company to work on projects large and complex in its main areas of interest: sustainable mobility and hydroelectric infrastructures benefiting from the current booming market thanks to the attention to the energy and climate transition and to the post-pandemic effort to increase the GDP and improve the quality of life.
S&P also appreciates “the improvement of the group’s operational processes and the qualified management team, aspects which are translating into a better management of risk and trend and working capital“.