Brazil's natural gas distribution companies (DisCos) should see
near-term growth fueled by diversification, sector expansion drivers and
a strong financial profile, according to a new Fitch ratings report.
"Low penetration within the commercial, residential and industrial
segments should spur growth opportunities given natural gas' strong
burning power, supply consistency and convenience when compared with
alternate energy sources," said Gustavo Mueller, Associate Director.
Fitch expects Brazil's DisCos to sustain sound financial profiles with
reduced leverage despite potential capex increases. DisCo net leverage
has been below 1.0x with several operators holding no debt.
Cash flow from operations during the last three years has supported
low-to-moderate capex, combined with manageable dividend distributions,
resulting in reduced positive free cash flow.
The industry faces some risks, including mid-term supply concerns,
industrial concentration, and regulatory and political structure.
The full special report titled 'Natural gas Distribution Sector in
Brazil' is available at www.fitchratings.com.
Additional information is available at 'www.fitchratings.com'.
Related Research
Natural Gas Distribution Sector in Brazil (Fueled to Grow)
https://www.fitchratings.com/site/re/885843
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Copyright Business Wire 2016
Source: Business Wire
(September 6, 2016 - 11:47 AM EDT)
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