MOL president Akimitsu Ashida has announced that Moody's ratings agency has upgraded the company's senior unsecured and issuer debt from Baa1 to A3.
MOL has reinforced profitability by increasing the efficiency of its ocean shipping business to cope with unsteady freight rates, bunker prices and foreign exchange rates, said Moody's, according to an MOL statement.
"The company also improved stability of its business by increasing long-term transport contracts and other transport contracts with the conditions that allow adjustment of freight rates according to bunker prices," said the statement.
"The company has advanced the diversification of its ocean shipping business by expanding LNG carrier, tanker, car carrier and dry bulker businesses. What's more, its entire business portfolio has been diversified by expanding shipping associated businesses such as terminal, logistics, and air cargo, as well as a real estate business," said the statement.
Despite of the hardships the company faces, MOL has the ability to continually execute management plans and it has well-balanced, sound financial policies, and its capital structure has greatly improved, thanks to its reinforced cash flow, Moody's reportedly said.
"Therefore," the MOL statement concluded, "the company will be able to further improve its capital structure in the future, although it has proactively expanded its fleet under the current mid-term management plan, which covered fiscal 2007 through 2009. Moody's believes that MOL will achieve stronger financial flexibility, even if market conditions deteriorate in the future."
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