INTERNATIONAL. Gate Gourmet’s credit rating has been upgraded from “˜stable’ to “˜positive’ in the recent ratings outlook issued by Moody’s Investors Service.
This move is said to reflect “continued improvement” in the airline catering and provisioning company’s operating performance over the past two years.
According to Moody’s the change in Gate Gourmet’s rating outlook reflects several factors:
• Successful implementation of the cost control measures and restructuring plan that started in 2004, which resulted in an improvement in cash flow;
• An expanded range of services as well as broader geographic diversification and wider customer base “that is likely to help Gate to take advantage of positive industry dynamics and withstand a likely cyclical downturn in the short term”;
• An expectation that the company will likely meet its goal to reduce leverage and will use its financial flexibility to continue to reduce debt;
• A comfortable liquidity position provided there is no severe deterioration in the market environment; and
• An expectation that positive trends in the airline industry, including outsourcing and increased long-haul traffic, will continue.
In a press release, Moody’s said the positive outlook reflects the expectation that Gate Gourmet will “continue to perform in line with its budget, strengthen its business profile and maintain adequate liquidity going forward.”
In addition, the company’s business fundamentals are expected to remain solid “despite the likely short-term contraction in growth expectations for the airline industry and related services resulting from higher oil prices and lower consumer spending.”
gategroup Chairman and CEO David Siegel (pictured) said: “The company is pleased that Moody’s continues to recognise the striking improvement in Gate Gourmet’s performance and potential, even in the face of a potentially harsher industry environment. We are committed to maintaining positive momentum with our expanded portfolio of products and services represented by our new gategroup umbrella brand.”
Moody’s corporate family rating on Gate Gourmet stands at B2, which was affirmed in April 2007.
ABOUT GATE GOURMET
Founded in 1992, Gate Gourmet is the world’s largest independent airline catering, hospitality and logistics company with dual headquarters in Zurich, Switzerland, and Reston, Virginia in the US. The company has expanded its products and services substantially through recent acquisitions.
gategroup, the leading provider of “˜above-the-wing’ services, is the umbrella brand introduced in February 2008 representing Gate Gourmet and ten other brands. The group’s portfolio integrates the competencies of partner companies in three areas – catering and hospitality, airport handling and logistics, and inflight solutions. Visit www.gategroup.com for more information.
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