Standard & Poor’s Ratings Services placed the long- and short-term ratings on Asahi Glass Co. on CreditWatch with negative implications. The rating change follows the AGC Group’s announcement that it expected net sales and operating income to be below its original forecast
Standard & Poor’s Ratings Services placed the long- and short-term ratings on Asahi Glass Co. on CreditWatch with negative implications. “We believe the likelihood the company will swiftly restore its financial soundness to levels commensurate with the current ratings has fallen because worsening external conditions have extended weakness in the profits of the company’s core architectural glass operations in Europe and flat panel display glass operations, in our view,” Standard & Poor’s officials were quoted in the July report.
The rating change follows the AGC Group’s July 11 announcement that it expected net sales and operating income for FY2012 to be below its original forecast. “Economic deceleration in Europe and China is causing increasing uncertainty in the global economy,” said AGC in a release. “Under such circumstances, the demand for architectural glass in the European region is expected to fall much below the expectation. With regard to glass for solar power systems, the business environment is growing severer than the initial forecast due to shrinkage of government subsidiaries in some countries and intensifying competition in the market, and this situation is expected to continue.” AGC officials also cited lower product prices for glass substrates for display devices as a reason for the revision.