[ET Net News Agency, 3 April 2020] Moody's Investors Service has changed the outlook on
Agile Group Holdings Limited (03383) to negative from stable. At the same time, Moody's
has affirmed Agile's Ba2 corporate family rating (CFR) and the Ba3 senior unsecured rating
on the bonds issued by Agile.
"The change in outlook to negative reflects Agile's weakened credit metrics because of
its increased debt to fund its expansion. While we expect the company's credit metrics
over the next 12-18 months will gradually improve, they will continue to position the
company at the weaker end of its Ba2 CFR," said Kaven Tsang, a Moody's Senior Vice
President.
"The negative outlook also reflects the uncertainty over the company's ability to
execute on its deleveraging plan in view of the challenging operating environment," added
Tsang.
Specifically, Moody's expects Agile's debt leverage, as measured by revenue/adjusted
debt, will trend to around 60% over the next 12-18 months from 51.2% in 2019, and for
EBIT/interest to recover to 3.0x from 2.3x over the same period. These credit metrics will
still position the company at the weaker end of its current rating.
The recovery in its financial metrics is driven by expected revenue growth in its
property development business following strong presales over the past 2-3 years. Such
growth in the property management business, along with increased capacity and the
continuing ramp-up of its environmental protection business will, in turn, support revenue
growth. (KL)