Watchdog flunks SAS
Moodys downgrade the prognosis for SAS from stabile to negative, according to a press release from the company, reported the news agency Direkt.
According to Moodys, the main reason is that SAS financial development in the first 6 months was poorer than expected. The credit watchdog does not see any improvement in the near future.
The results in the SAS group will still be restrained by the challenges the company is facing, among other things, the strong competition from the discount fare companies, the low numbers of business travellers and the high operating costs. At the same time, Moodys gave SAS praise for managing to stick to its own improvement program Turnaround 2005.
Moodys decided to keep its credit rating on SAS this time. As a result, the company will most likely not get increased interest costs because the credit rating company only degraded the prognosis.
However, in order for SAS to maintain todays credit rating, higher net profit margins and an improvement in the relation cash flow and net dept are required, according to Moodys press release.
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