AEON's consolidated earnings performance is likely to remain on track to recovery in the next one to two years because, in our view, profits from its retail business, including its mainstay GMS business, are likely to recover gradually and its shopping center development business overseas is likely to make greater contributions to profit. We are affirming our 'BBB+' long-term corporate credit and senior unsecured debt ratings on the company. The outlook remains negative, reflecting our view of at least a one-in-three chance key financial ratios for AEON will recover more slowly than we assume. This is because although its various restructuring measures are likely to fuel a gradual recovery in profits, ongoing active investments might keep debt at heightened levels.
