Risk is considered above average for the sector due to the long construction cycle and direct exposure to macroeconomic conditions. The disparity between the financial and operating performance of Brazilian homebuilders has resulted in a wide disparity of ratings within the sector.
The report also includes a review of financial factors. Cash burn, measured as net debt variation, is an important gauge of credit trends, as it often reflects free cash flow generation. Positively, the net debt of those Brazilian homebuilders rated by Fitch declined by
The continued growing level of sales contract cancellations is one of the main concerns for Brazilian homebuilders and remains a key component of credit analysis, as the high cancellation levels have hurt cash flow generation against expectations and have driven up the cost of carrying inventory.
This report is available at www.fitchratings.com or by clicking the link above.
Additional information is available at 'www.fitchratings.com'.
Fitch Ratings Brasil Ltda.
Praca XV de Novembro, 20 - Sala 401 B - Centro -
Source: Fitch Ratings
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