Moody's Downgrades Emart Credit Rating to 'Ba2'... "Profitability Weakness"
[Asia Economy Reporter Moon Hyewon] Moody's announced on the 22nd that it has downgraded Emart's corporate credit rating from 'Ba1' to 'Ba2'.
The rating outlook was revised from 'negative' to 'stable'.
Moody's explained, "Emart's profitability is expected to remain at a sluggish level," adding, "This reflects the expectation that high financial leverage will persist over the next 1 to 2 years due to continuous large-scale investments."
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It continued, "Amid fierce competition, poor performance in the hypermarket and online business sectors will be the main factors weakening profitability," and "This outweighs the effects of cost rationalization efforts and the additional profit contribution from SCK Korea (formerly Starbucks Korea), which has been consolidated since the fourth quarter of last year."
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