22 November 2007 09:00 [Source: ICIS news]
MUMBAI (ICIS news)--Moody’s Investors Service placed Japan's Ube Industries under review for a possible upgrade as it believed the firm's overall credit profile is likely to improve over the medium term, backed by record expected earnings and cash flow, it said on Thursday.
"In its review, Moody's will assess the company's ability to further strengthen the competitive positions of its core businesses while restoring the aluminum wheel business and to maintain profitability," it said.
The ratings agency currently has a "Ba1" senior unsecured debt rating on the chemicals major.
Moody's would also focus on Ube's financial strategy, including investments for future growth under the current medium-term plan began in April, it added.
"Each business in which the company has a strong market position globally or Asia - caprolactam, polyimide, nylon resins, synthetic rubber, and battery materials - is contributing to improved earnings," Moody’s said.
Progress of new agents in the fine chemicals and pharmaceuticals divisions were also helping improve overall earnings, it added.
The company expected to achieve operating profits of yen (Y) 51bn ($469.3m) for the third quarter ending 31 December, Moody's said.
These would be historically high numbers, offsetting continuous hikes in raw material costs, it added.
Ube's stock was trading down 0.24% at Y402 at 07:16 GMT on the Tokyo Stock Exchange.
The company is a leading manufacturer of caprolactam and derivatives, including nylon resin and other products including chemicals, functional materials, pharmaceutical products, fine chemicals, construction materials, machinery and aluminum wheels.
($1 = Y108.83)
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