Scope has placed the BB- rating of Metalcorp Group B.V. under review for possible upgrade

Scope Ratings (Scope) has placed the BB- rating of Metalcorp Group B.V. (Metalcorp) under review for possible upgrade.

This rating action is primarily driven by a revision of Scope´s rating methodology for non-financial corporates, which was published on March 28, 2014. This rating action reflects the possible impact of the revised methodology on Metalcorp’s rating, but it also incorporates Metalcorp’s recent positive performance. In particular, Metalcorp’s annual results for 2013 indicate large improvements in the group’s profitability (operating margin 2013 of 2.1% vs. 1.2% in 2012) and liquidity profile despite a 22.1% decline in revenue to EUR 301.7m. Moreover, the company is providing higher visibility on 2014 and beyond thanks to significant new supply agreements in the high-margin segment of non-ferrous metals (e.g. aluminium and copper). Hence, Scope presumes that the company’s profitability ratios can be improved further.

The review will focus on reassessing the impact of Scope’s revised rating methodology, including among other evolutions the stronger focus on forward-looking analysis and on qualitative elements, and a recalibration of the financial ratios used in the rating framework. In addition, Scope will incorporate into the analysis the latest business and financial performance indicators of Metalcorp, collected during the review period. The new methodology is available on Scope´s website at www.scoperatings.com.

Upon implementing its revised methodology, Scope immediately began reassessing all of its outstanding corporate ratings and expects a negative impact on the ratings of a large number of European SME issuers and their debt, which would result in possible rating actions. These rating actions will be released as soon as the analyses are completed.

About Metalcorp Group B.V.
The Dutch Metalcorp Group B.V.is a leading European producer of high-quality secondary aluminium. In addition, the group is engaged in the worldwide trading of steel, non-ferrous metals and alloys. The group operates globally with more than 20 locations around the globe. In 2013 the group reported revenues of EUR 301.7m, an operating margin of 2.1% (2012: 1.2%) and a pre-tax margin of 1.3% (2012: 0.7%).

More information about Scope on www.scoperatings.com.

REGULATORY DISCLOSURES

Important information
Information pursuant to Regulation (EC) No 1060/2009 on credit rating agencies, as amended by Regulations (EU) No. 513/2011 and (EU) No. 462/2013

Responsibility
The party responsible for the dissemination of the financial analysis is Scope Ratings GmbH, Berlin, District Court for Berlin (Charlottenburg) HRB 145472, directors: Thomas Morgenstern, Florian Schoeller.

The rating analysis has been prepared by Sebastian Zank, Lead Analyst.
Responsible for approving the rating: Thomas Morgenstern, Managing Director.

Rating history
24.04.2014 BB- under review for possible upgrade
12.06.2013 BB- outlook stable

Information on interests and conflicts of interest
The rating was prepared independently by Scope Ratings but for a fee based on a mandate of the rated entity.

As at the time of the analysis, neither Scope Ratings GmbH nor companies affiliated with it hold any interests in the rated entity or in companies directly or indirectly affiliated to it. Likewise, neither the rated entity nor companies directly or indirectly affiliated with it hold any interests in Scope Ratings GmbH or any companies affiliated to it. Neither the rating agency, the rating analysts who participated in this rating, nor any other persons who participated in the provision of the rating and/or its approval hold, either directly or indirectly, any shares in the rated entity or in third parties affiliated to it. Notwithstanding this, it is permitted for the above-mentioned persons to hold interests through shares in diversified undertakings for collective investment, including managed funds such as pension funds or life insurance companies, pursuant to EU Rating Regulation (EC) No 1060/2009. Neither Scope Ratings nor companies affiliated with it are involved in the brokering or distribution of capital investment products. In principle, there is a possibility that family relationships may exist between the personnel of Scope Ratings and that of the rated entity. However, no persons for whom a conflict of interests could exist due to family relationships or other close relationships will participate in the preparation or approval of a rating.

Key sources of Information for the rating
Annual financial statements, annual reports/semi-annual reports of the rated entity/issuer, external market reports, external market reports, data provided by the issuer or/and external data providers, website of the rated entity/issuer, research Scope Group.
Scope Ratings considers the quality of the available information on the evaluated company to be satisfactory. Scope ensured as far as possible that the sources are reliable before drawing upon them, but did not verify each item of information specified in the sources independently.

Examination of the rating by the rated entity prior to publication
The rated entity has been given the opportunity to examine the rating action prior to publication. Following that examination, the rating was not modified.

Methodology
The methodology applicable for this rating (Corporate Rating Methodology published in March 2014) is available on www.scoperatings.com. The historical default rates of Scope Ratings can be viewed on the central platform (CEREP) of the European Securities and Markets Authority (ESMA): http://cerep.esma.europa.eu/cerep-web/statistics/defaults.xhtml. A comprehensive clarification of Scope’s default rating, definitions of rating notations and further information on the analysis components of a rating can be found in the documents on methodologies on the rating agency’s website.

Conditions of use / exclusion of liability
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