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Investing.com -- Fitch Ratings has affirmed Alpek’s long-term ratings at ’BBB-’ but revised the outlook to negative from stable, citing prolonged pressure on the petrochemical company’s profitability.
The rating agency noted that Alpek’s EBITDA net leverage will likely exceed the negative rating sensitivity threshold of 2.5x in both 2025 and 2026, as the petrochemical sector downturn has proven "longer and deeper than anticipated."
Alpek’s ratings continue to be supported by its leading market positions across the Americas in key segments and broad geographical diversification. However, these strengths are partially offset by concentrated exposure to paraxylene (Px) feedstock.
Fitch projects EBITDA margins to remain below 10% over the rating horizon, structurally subdued by lower paraxylene reference margins amid persistent oversupply from Chinese overcapacity. The situation is further strained by 10% U.S. tariffs on Px.
To avoid these tariffs, Alpek has redirected most sourcing to the U.S., though this has created greater logistical challenges since Px plants are concentrated on the Gulf Coast.
The company is implementing structural cost-reduction initiatives over the next two years to protect EBITDA margins. Fitch forecasts positive free cash flow over the rating horizon, assuming no dividend payments or extraordinary capital expenditures.
Alpek’s capital expenditure is expected to be around MXN2.6 billion in 2025, with an annual average of MXN3.0 billion between 2026 and 2028. The company also benefits from a manageable debt maturity profile, with no major maturities until 2028, and has approximately $555 million in available committed credit lines.
The spinoff from its controlling shareholder, Alfa S.A.B. de C.V., is expected to be completed during 2025, though Fitch noted this process does not directly affect Alpek’s ratings.
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