International rating agency Fitch Ratings has upgraded the long-term issuer default rating of the Russian steelmaker Severstal to BBB from BBB-, with a stable outlook.
“The rating upgrade reflects Severstal’s tested conservative financial policy during the supply-driven steel price turbulence in 2016-2017 and increasing protectionism since 2018. Its strong financial profile has been driven by very low steel-making costs underpinned by its integration in iron ore and coal, focus on high-value added products with over a 45% share in sales, and modest capex,” Fitch said. “We expect Severstal to maintain its conservative financial profile despite a conservative outlook for steel prices, and temporarily elevated dividends driving negative free cash flow (FCF) until 2021.” (Prime/Ukrainian metal)