Creditreform Rating has confirmed the unsolicited corporate issuer rating of Naturgy Energy Group, S.A. (Naturgy) at BBB+ and changed the outlook from stable to negative. The main reasons for the change in outlook are the negative impact on the company's business performance in 2020, which were affected by lower global energy demand and production cuts due to the COVID-19 pandemic. Macroeconomic developments which reflected a sharp decline in commodity prices, including gas and wholesale electricity prices, led to a drop in sales. In addition, impairment effects burdened consolidated earnings in the 2020 financial year. Moreover, Naturgy's business climate is negatively affected by the situation in the Latin American regions due to the ongoing economic uncertainties and the weak currency. Given the company's strong position in its relevant geographic markets and its diversified, systemically relevant business model, we confirm the rating of Naturgy at BBB+. The Company´s solid financial figures and good access to the capital market also provide a good basis for coping with potential challenges.
Creditreform Rating has confirmed the BBB+ unsolicited corporate issuer rating of Naturgy Energy Group, S.A. The stable outlook remains in place. The rating result of Naturgy Energy Group, S.A. reflects its scale, its geographical and product diversification, as well as high proportion of regulated and contracted activities - reflected in a large proportion of stable and predictable cash flows. The Company has a solid earnings capacity and strong financial metrics, which have improved in the course of the implementation of the cost efficiency program introduced in 2018. Naturgy´s proved access to financial markets, solid liquidity, controlled investment policy and commitment to financial discipline underpin our rating assessment. However, a significant part of Naturgy´s business remains negatively affected by volatile power demand and prices. The Company´s generous dividend policy, with envisaged further annual increase in distribution payments and share buyback program, particularly against the backdrop of the overall economic slowdown resulting from the COVID-19 pandemic, coupled with a drop in energy demand and aggravated counterparty and liquidity risks, have a dampening effect on the rating.
Creditreform Rating has carried out an unsolicited rating of Gas Natural SDG, S.A. The rating has been set to BBB+/stable.
Within the framework of the new strategic plan 2018-2022, Gas Natural SDG, S.A. changed its name into Naturgy Energy Group, S.A. since 27 June 2018. The current rating of former Gas Natural SDG, S.A. will be pursued by Creditreform Rating AG under the name Naturgy Energy Group, S.A.