OREANDA-NEWS. Liquidity ratios remained robust for Peruvian corporates in 2015, as companies successfully streamlined cost structures and optimized capex programs, according to a new Fitch Ratings report.

"Capex was reduced alongside other cash flow preservation measures, including focus on profitability and reducing dividends," said Josseline Jenssen, Director. "Median dividend payments reduced to zero in 2015 compared with negative USD13 million in 2014 and negative USD7 million in 2013, highlighting management's focus on preserving cash flow during a period of low commodity prices."

Fitch classifies 79 percent of its Peruvian corporates portfolio as having very strong to satisfactory liquidity positions at the end of 2015, while 21 percent were designated with weaker liquidity profiles.

Median free cash flow improved by 70 percent to negative USD16 million for Peruvian corporates from negative USD53 million in 2014. Average free cash flow improved by 77 percent over the same period.

Fitch projects median cash flow from operations to decrease by 17 percent during 2016 based on lower mid-cycle commodity price assumptions and expectations of a tougher trading enviornment during a presidential election year.

Companies in Peru benefit from access to a robust banking system and a local capital market that has continued to exhibit liquidity during a time of difficult credit conditions across much of the rest of Latin America.

Fitch expects a modest level of cross-border debt issuance for refinancing purposes by Peruvian corporates during 2016. Most significant Peruvian corporate debt maturities are not due until 2020.