Ambipar (AMBP3): Fitch provides opinion on debt reduction plan

Circular project from Ambipar (Photo: Disclosure / Ambipar).

The credit rating agency has increased the rating outlook for the environmental management company; see the details.

The credit rating agency Fitch has raised the rating outlook for Ambipar (AMBP3) from stable to positive. This measure reflects Fitch’s optimism regarding the company’s deleveraging strategy (debt reduction) in the environmental management sector. The agency’s ratings include the subsidiaries Ambipar Response, which handles environmental crisis management, and Ambipar Environment, which focuses on environmental and waste management.

According to the press office of the environmental management company, Fitch also maintained the long-term default rating (IDRs, in English acronym) in foreign and local currency at BB-, with a positive outlook, and the rating of the senior unsecured green bonds at BB-. The NLTR – a rating that compares risk relative to all other issuers in the same country – for Ambipar and its subsidiaries remained at AA-.

“This decision by Fitch shows that the company’s financial health is moving in the right direction to consolidate the business’s strength and good long-term prospects,” evaluated Ambipar’s CFO, João Arruda, in a statement.

In the latest financial statement, covering the second quarter of 2024, Ambipar reported a leverage of 2.82 times the ratio of net debt to earnings before interest, taxes, depreciation, and amortization (Ebitda). The company’s net debt reached R$ 4.9 billion at the end of June, compared to R$ 4.6 billion in the first quarter of 2024 (leverage of 3.1 times) and R$ 4.2 billion in the second quarter of 2023 (2.9 times).

Ambipar’s (AMBP3) Debt Reduction Plan

According to Ambipar, Fitch informed that the positive outlook reflects expectations of success in the company’s deleveraging plan through organic growth, debt reduction actions, and improved operational efficiency. “The company also benefits from its positive history of contract renewals. The ratings of the three companies are aligned and reflect the consolidated credit profile of the group,” Fitch said in a statement sent to the press.

In the latest balance sheet, the Ambipar board highlighted the start of the deleveraging plan, with results coming from “revenue growth, better management of working capital with reduced days of receivables, and a historically low level of Capex (investment resources) as a percentage of revenue.”

Fitch expects Ambipar (AMBP3) to reduce its debt by about R$ 1 billion by the end of 2024.

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