Big three ratings agency Fitch Ratings has affirmed the long-term and short-term national ratings of Grupo Argos S.A. at AAA and F1+ and adjusted the its outlook for the company to “stable” from the previous “evolving watch” status.
According to the New York-based agency, Grupo Argos continues to show credit quality, overall “robust credit metrics” projections, and stability of dividend flows from its diverse investments, which are expected to hit nearly 978,000 million Colombian pesos this year.
“Fitch projects that recurring dividend flow will normalize from 2024 and continue to strengthen in the following years with the incorporation of higher dividends from Grupo de Inversiones Suramericana given the expected increase in Grupo Argos’ shareholding with the closing of the transaction,” stated Fitch in a note to investors. “Cash generation is also supported by the contribution of net cash flows from the urban development business.”
Fitch Ratings framed its decision to remove the “evolving watch” status as informed by the “progress of the transaction between the company and the companies JGDB S.A.S, Nugil S.A.S, International Capital Holding L.L.C, AFLAJ Investment L.L.C, Grupo Nutresa S.A. and Grupo de Inversiones Suramericana S.A., which has undergone several corporate and regulatory approvals.”
Dividend flows were also considered along with the “adequate liquidity position to meet the commitments arising from the exchange of Grupo Nutresa shares, without anticipating a weakening of its credit profile.”
Argos Cement Colombia (Photo credit: Jared Wade)