TPG outlook cut to stable from positive
Standard & Poor’s Corp said said it revised downwards its
outlook on TPG NV to stable from positive. The revision reflects concerns that the current uncertainty and weakness in
the US and European economies will impact sales growth and profitability in the
group’s express business, diluting the more favourable trends in mail and
logistics, the ratings agency said. S&P said it expects TPG’s revenues in the lower-margin logistics division to
rise much faster than in the high-margin and cash-generative mail business. The express division has to demonstrate its ability to increase revenues and
margins and therefore withstand the challenging economic situation. The outlook is also based on the expectation that the company will not make
major debt-financed acquisitions, S&P said. S&P affirmed its single-‘A’/’A-1’ corporate credit ratings on TPG, as well
as its ‘A-1’ commercial paper rating on related entity TNT Post Group Finance
BV, which is guaranteed by TPG. The ratings on TPG reflect the company’s strong position in the Dutch mail
business and its good position in the global express and logistics businesses,
combined with a conservative financial profile, S&P said. At the end of 2001, S&P expects a noticeable net debt increase against
year-end 2000 due to continuing high capital expenditures and acquisitions, as
well as higher working capital, but net debt to capital is not expected to rise
significantly above 50 pct. ls/jsa
For more information and to contact AFX: www.afxnews.com and www.afxpress.com
RBC NEWS, 05th September 2001
