Moody’s boosts outlook for US Rockwood on diverse product portfolio

02 June 2009 18:23  [Source: ICIS news]

HOUSTON (ICIS news)--Moody’s revised the ratings outlook on US specialty chemicals producer Rockwood Holdings to positive from stable behind the company’s diverse product portfolio, the ratings service said on Tuesday.

Moody’s said it anticipated a continued stable operating performance from Rockwood going forward along with the prospect for further meaningful debt repayment.

“The change to a positive rating outlook incorporates our anticipation that major additional debt financed acquisitions are unlikely, and that Rockwood's remaining business lines will generate, over time, cash flow that is positive and improving relative to existing debt levels,” Moody’s said.

Moody’s affirmed the current credit ratings for the company, citing praising Rockwood’s diversity of products, end markets and customer base. Among other things, the company produces titanium dioxide (TiO2) pigments and advanced ceramics.

The top 10 customers account for about 8% of net sales, Moody’s said, with no single customer accounting for more than 2% of sales. Moreover, the largest end-use market only represents about 17% of sales, Moody’s said.

In addition, Moody’s said it took comfort in Rockwood’s limited exposure to volatile petrochemical and energy costs as well as the company’s broad base of raw materials in which no single material contributes more than 1.7% to the cost of goods sold.

Rockwood posted a first-quarter net loss of $3.8m (€2.7m) due to a significant falloff in demand as a result of the global recession.

Shares of Rockwood on the New York Stock Exchange traded at $16.39, up 3.1%, at midday.

($1 = €0.71)

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By: Ben DuBose
+1 713 525 2653



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