Eurasian Resources Group upgraded by S&P to ‘B’ on strong performance and reduced debt; outlook is stable
Eurasian Resources Group (“ERG” or “the Group”), a leading diversified natural resources group headquartered in Luxembourg, has received an upgrade from Standard & Poor’s (“S&P”) in its long-term credit rating to ‘B,’ up from ‘B-’, with a ‘stable outlook’, on the basis of the Group’s strong performance and robust markets.
The leading credit ratings agency highlighted that ERG is set to have another strong year with record-high S&P Global Ratings-adjusted EBITDA and stronger funds from operations (FFO), thanks to its debt reduction measures and very robust markets. The agency expects the Group to maintain both sufficient liquidity sources to cover its needs, and a reasonably diversified treasury policy.
The ‘stable’ outlook also reflects S&P’s expectation that ERG will continue to benefit from its diverse product portfolio and the supportive market environment, with demand for all of ERG's products remaining strong in 2022. Among additional positive factors, in today’s environment, the ratings agency noted that ERG currently has very limited reliance on supplies from Russia as well as Russian transport links, given that much of its sales go to China through the Kazakhstan/China border.
S&P explicitly noted the Group’s successes in further diversifying its business, while cobalt, one of the Group’s key products, is an important component in lithium-ion batteries, which has good demand growth prospects due to the important role of batteries in the energy transition and the rise of electric vehicles.
Benedikt Sobotka, CEO of ERG, said: “This credit rating upgrade by S&P reflects ERG’s strong performance and the team’s fantastic work to make our operations ever more efficient and robust. ERG is a major global producer of many key metals that are essential to the net-zero transition, and against the backdrop of rising demand for these materials, we are well-positioned to continue growing as a global sustainable market leader.”