Fitch: Latin American Corporates Face Cash Flow Volatility Through 2017
"Cash flow is projected to remain under pressure for 2016 due to slow economic growth, weak commodity prices, uncertainty regarding the U. S. election, and fallout effects from the Brexit vote," said Phillip Wrenn, Associate Director "The ability to maintain robust liquidity amid the economic uncertainty ahead is a key consideration the remainder of 2016 and through 2017."
Aggregate funds from operations declined by 34 percent to USD109 billion in 2015. Aggregate free cash flow generation improved to USD39 billion in 2015 from USD36 billion in 2014 as issuers slashed capex against the difficult backdrop. Median EBITDA margin expanded by 1.3 percent.
Strong cash flow performance stood out in the building materials sector with CEMEX, Elementia, Grupo Cementos de Chihuahua, and Cementos Progreso.
Also exhibiting solid growth were major export businesses such as Fibria, Suzano, and Empresas CMPC, which profited from the appreciation of the U. S. dollar. Suzano and CMPC further benefited from new production capacity which came online.