Moody's Declares Samsung Electronics' Aa3 Rating; Outlook Stable
International rating Agency Moody's Investors Service confirmed the rating of South Korean electronics manufacturer Samsung Electronics at the level of "Aa3", the forecast is stable, the Agency said in a statement.
"The confirmation of the rating reflects the company's stable performance, good cash flow and stable financial balance throughout the economic and business cycles, such as the downturn in the memory chip sector in 2019 and the economic downturn this year; the rating is supported by a reasonable approach to financial management. The brand that the company has created and technological excellence will continue to lead the company to a leading position in the market and increase free cash flow over the next 2-3 years," the Agency's release quotes Gloria Tsuen, Vice President and senior analyst at Moody's.
According to the release, the company's rating is supported by its technological and commercial leadership in key business segments, including memory chips, mobile devices, displays, and consumer electronics. Also, the Agency notes exceptionally good indicators of the company's financial reserves.
"Moody's may eventually raise the rating of Samsung Electronics if the company improves business stability by strengthening its leading position in key areas of operation and significantly diversifying its business and revenue sources. At the same time, the company's rating may be lowered if the adjusted operating margin falls below 13-14%, the ability to generate free cash flow weakens, or the net cash indicators deteriorate," the rating agency reports.
Samsung Electronics is an international manufacturer of electronics: semiconductors, telecommunications equipment, memory chips, liquid crystal displays, mobile phones, and monitors. The company is headquartered in Seoul.