S&P Global Ratings has raised Embraer’s rating from “BB+” to “BBB-” and maintained a stable outlook.
According to S&P, Embraer’s strong cash generation allied with higher aircraft deliveries, cost reduction and efficiency measures led to free cash flow in 2023 that was considerably stronger than the company’s guidance to the market.
In a statement to clients, S&P highlighted Embraer’s continued focus on lean operations combined with its robust backlog should support solid cash flows in coming years. The stable outlook considers Embraer will keep signing new contracts in all business segments, supporting its solid backlog and cash flows, while maintaining its low financial leverage over the next few years.
In his remarks, Antonio Carlos Garcia, CFO of Embraer said; “The S&P upgrade is an important recognition of the focus and discipline with which the company’s financial management has been carried out in recent years. The turnaround of our business is complete, and we are on the right track to deliver more sustainable growth with higher financial profitability from now onwards”.
Other two main rating agencies in the financial market have also revised their forecasts for Embraer in a positive fashion, improving their rating notes. Fitch Ratings revised the company’s BB+ with a positive outlook, while Moody’s raised to Ba1 the rating and maintained a stable outlook.
Meanwhile, Embraer, the global aerospace company headquartered in Brazil has businesses in Commercial and Executive Aviation, Defense & Security, and Agricultural Aviation.
The company designs, develops, manufactures, and markets aircraft and systems, providing after-sales service and support to customers. Since it was founded in 1969, Embraer has delivered more than 8,000 aircraft.
On average, every 10 seconds an aircraft manufactured by Embraer takes off somewhere in the world, transporting more than 145 million passengers a year.
Embraer is the main manufacturer of commercial jets with up to 150 seats and the main exporter of high value-added goods in Brazil. The company maintains industrial units, offices, service centers, and parts distribution, among other activities, in the Americas, Africa, Asia, and Europe.
