AGC placed on CreditWatch negative after revising FY2012 sales forecast
Standard & Poor's Ratings Services today placed the long- and short-term ratings on Asahi Glass Co. on CreditWatch with negative implications. "We believe the likelihood the company will swiftly restore its financial soundness to levels commensurate with the current ratings has fallen because worsening external conditions have extended weakness in the profits of the company's core architectural glass operations in Europe and flat panel display glass operations, in our view," Standard & Poor's officials are quoted as saying in this July 18 Reuters report.
The rating change follows the AGC Group's July 11 announcement that it expected net sales and operating income for FY2012 to be below its original forecast. Read the specifics here.
"Economic deceleration in Europe and China is causing increasing uncertainty in the global economy," said AGC, in a release. "Under such circumstances, the demand for architectural glass in the European region is expected to fall much below the expectation. With regard to glass for solar power systems, the business environment is growing severer than the initial forecast due to shrinkage of government subsidiaries in some countries and intensifying competition in the market, and this situation is expected to continue."
AGC officials also cited lower product prices for glass substrates for display devices as a reason for the revision.