Moody's revised its ratings outlook on LafargeHolcim Ltd to stable from negative, citing the Swiss building materials and solutions maker's strong operating performance in 2018 despite a challenging market environment.
The rating agency, which also affirmed the company's ratings, highlighted LafargeHolcim's announcement of a scrip dividend when it reported full-year 2018 earnings on March 7. Moody's said the scrip dividend will help further improve the cement maker's credit profile and, assuming a take-up of around 50% in shares on the offered scrip dividend, improve free cash flow generation.
As part of the ratings action, Moody's affirmed LafargeHolcim's long- and short-term issuer ratings at Baa2 and P-2, respectively.
In its fiscal 2018, LafargeHolcim's net income before impairment and divestments rose to CHF1.57 billion, or CHF2.63 per share, from CHF1.42 billion, or CHF2.35 per share, in 2017.