Moody’s: Italian companies’ credit quality to stay stable into 2018

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Finanza Operativa di Finanza Operativa 13 Giugno 2017 | 19:30

Sluggish economic growth and weak consumer
confidence will hamper the ability of Italian non-financial companies to
boost their creditworthiness, resulting in broadly stable credit quality
for the sector into 2018, says Moody’s Investors Service in a report
published today.
This report is part of a series (including Spain, Germany, the UK and
Sweden) looking at the main issues affecting corporate credit quality in
Europe over the next 12-18 months. “Italian companies with a high
exposure to the domestic economy, and utilities and infrastructure
companies in particular, are exposed to any potential deterioration in
the sovereign’s credit profile, but this would have little effect on
other sectors,” says Paolo Leschiutta, Vice President — Senior Credit
Officer at Moody’s. “Italian corporates should also remain largely immune
to challenges in the domestic banking system and we expect companies’
liquidity to remain good.”
Italian utilities and infrastructure companies’ credit quality will remain
broadly stable in 2017 also supported by good access to domestic and
international funding sources. However, these sectors remain exposed to
the risk of a weaker sovereign as well as political interference.
Italian telecoms’ credit quality will remain stable in the next 12-18
months. But the entry of a new competitor, Iliad, will pressure the
revenues of incumbent operators Wind Tre S.p.A. (B1 positive), Telecom
Italia S.p.A. (Ba1 stable) and Vodafone Italy (unrated). However, fixed
and mobile incumbents should be able maintain robust margins, allowing
for stable free cash flow generation and leverage reduction.
The main challenge for the Italian gaming companies rated by Moody’s
(i.e., Gamenet Group S.p.A. (B1 stable), Schumann S.p.A (Sisal, B1
stable) and SNAITECH S.p.A. (B2 stable)) is the evolving regulatory and
taxation regime, combined with their relatively small exposure to the
faster growing online betting and gaming market.
Italian consumer products companies, such as TWIN SET – Simona Barbieri
S.p.A. (B2 stable) and Safilo S.p.A. (Ba3 stable), will be able to offset
low domestic growth through cost savings and expansion in overseas
markets, resulting in broadly stable credit quality for the sector into
2018.
Subscribers can access the report at:
http://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_1071128

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