Fitch Ratings has downgraded Sri Lankan consumer-durable retailer Singer (Sri Lanka) PLC's National Long-Term Rating to 'A(lka)' from 'A+(lka)'. The Outlook is Stable.
The downgrade reflects the sustained deterioration in Singer's financial profile such that Fitch-forecasted EBITDAR fixed-charge cover will fall to 0.7x in the financial year ending 31 March 2024 (FY24), compared with 1.1x in FY23.
The Stable Outlook reflects Singer's adequate liquidity supported by its access to domestic banks, and our expectations that the company's EBITDA will recover gradually in the next two years supported by a slow improvement in demand amid falling interest rates and the removal of the ban on consumer durable imports since October 2023.
However, we do not expect fixed charge cover to improve to above 1.2x - the level commensurate with a higher rating - until after FY25.Fitch-Downgrades-Singer-Sri-Lanka-PLC-to-Alka_-Outlook-Stable