According to Fitch Ratings, the adverse scenario for ethanol sales should not result in credit rating downgrades for firms. According to the entity, strong sugar prices and favorable forecasts for the current sugarcane harvest could help sugar-energy firms’ earnings. Only sugarcane processors without plants will have their margins squeezed. Because raw material prices are lower, the loss in profitability among corn-using firms should be limited. Fitch expects these five firms to have a net leverage of less than 3 times in 2023, which is in line with the rating margin.
Source: Nova Cana (*Translated by Ia Niani)