Research Update: Alpek Upgraded To Investment Grade On Stronger Business Profile And Solid Financial Performance; Outlook Stable

Mexico-based petrochemicals producer Alpek S.A.B. de C.V.'s operating performance has strengthened, illustrated by its resilient product portfolio amid the COVID-19 pandemic. In our view, stronger demand in the main industries that Alpek provides products to and high petrochemical prices will support the company's revenues and EBITDA growth in the next 12 months. The diversity of Alpek's products and the varied industries it serves will also keep strengthening its business profile. Alpek's financial results have also improved this year thanks to healthy volume sales and higher margins in its polyester and plastic and chemicals divisions, resulting in lower leverage than we expected. For the last 12 months ended Sept. 30, 2021, Alpek's leverage ratio was 1.6x versus our previous estimate of

...- Mexico-based petrochemicals producer Alpek S.A.B. de C.V.'s operating performance has strengthened, illustrated by its resilient product portfolio amid the COVID-19 pandemic. In our view, stronger demand in the main industries that Alpek provides products to and high petrochemical prices will support the company's revenues and EBITDA growth in the next 12 months. The diversity of Alpek's products and the varied industries it serves will also keep strengthening its business profile. - Alpek's financial results have also improved this year thanks to healthy volume sales and higher margins in its polyester and plastic and chemicals divisions, resulting in lower leverage than we expected. For the last 12 months ended Sept. 30, 2021, Alpek's leverage ratio was 1.6x versus our previous estimate of 2.0x. - On Dec. 15, 2021, S&P Global Ratings raised its global scale issuer credit and issue-level ratings on Alpek to '###-' from '##+'. - The stable outlook reflects our view that Alpek's operating...

Research Update