Business diversification and strong market shares; Solid operating margins through economic cycles; High cash liquidity; and Increasing exports and revenues outside Brazil. Geographic concentration in Brazil; Expansion into the more volatile banking business; High capital expenditures consuming free cash flows; and Subpar corporate governance practices. The ratings on Votorantim Participações S.A. (VPar) reflect its broad business diversification in segments in which the group benefits from strong fundamentals, resulting in stable operating margins and resilient cash flows. The rating also reflects VPar's moderate financial policy, characterized by very strong liquidity and low net debt levels. These positives are balanced by VPar's high geographic concentration; ambitious growth plans; relatively high gross debt leverage; and mounting exposure to financial businesses, which are, on...
Companies mentioned in this report are:
- Votorantim Participacoes S.A.
- Brazil (Federative Republic of)
- CPFL Energia S.A.
- Banco Votorantim S.A.
- Votorantim Cement North America Inc.
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