Moody's changes outlook on Asahi Glass to stable from negative; affirms A2 issuer rating

Moody's Japan K.K. has changed the ratings outlook on Asahi Glass Co., Ltd. (AGC) to stable from negative.

Moody's has also affirmed AGC's A2 long-term issuer rating as well as the P-1 commercial paper rating of AGC Capital, Inc.RATINGS RATIONALE"The change in outlook to stable from negative principally reflects our view that the company's profitability has reached an inflexion point and has started to recover.At the same time, its debt is decreasing," says Takashi Akimoto, a Moody's Analyst.

"We expect AGC's profitability will modestly improve during the next 12-18 months, supported by stabilization in its glass business and gradual growth of its chemicals business, and this is reflected in the stable outlook," says Akimoto who is also the Lead Analyst for the company.

"Our expectation is that the weakness in AGC's profitability has passed its low point, supported by stabilization in its glass business, which is largely due to restructuring measures, as well as an improved growth outlook for its chemicals business," says Akimoto.

In addition, Moody's notes that the pace of deterioration in the profitability of AGC's electronics business has eased somewhat.

AGC expects consolidated operating profit of JPY62.0 billion, which is almost flat from the previous year, and a 4.4% operating margin in for fiscal year ending December 2015 (FYE12/2015).

More:Research Document.pdf

600450 Moody's changes outlook on Asahi Glass to stable from negative; affirms A2 issuer rating
Date: 29 June 2015
Source: Moody's Japan K.K.

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