Fitch Affirms Sierra Cables at ‘A+(lka)’; Outlook Stable

Fitch Ratings has affirmed Sri Lankan cable manufacturer Sierra Cables PLC's National Long-Term Rating at 'A+(lka)'. The Outlook is Stable.

The affirmation and Stable Outlook reflect our view that Sierra will be able to maintain adequate financial metrics in the next 12 months. The improving trajectory in Sri Lanka's external finances and lower domestic interest rates should see more construction projects come back on to the market, in turn benefitting Sierra's cash flow.

Sierra's rating reflects its small operating scale and exposure to cyclical end-markets, as well as foreign-currency risk, which are mitigated by its prominent position in the domestic cable industry. Sierra has limited liquidity headroom - given high short-term debt - and is exposed to lenders' appetite to roll over working-capital facilities.