S&P downgrades transport giant Super Group

CAPE TOWN – S&P Global Ratings downgraded the long-term national scale rating of Super Group from zaAAA to zaAA due to the effects of Covid-19 and its negative impact on the transport and motor industries worldwide.

Super Group’s short-term national scale rating from S&P was, however, affirmed at zaA -1+, a statement from S&P said yesterday. Super Group’s share price was down 4.15percent to R14.33 early in the afternoon, before closing at R13.94.

S&P said Super Group’s supply chain, transport and car dealership operations in South Africa, Australia and Europe would be hurt by restrictions, weak global car demand and reduced economic activity stemming from the Covid-19 pandemic.

“We expect the resulting drop in revenue, earnings, and cash flow to lead to weaker leverage and cash flow adequacy metrics in the year ending June 30, 2020, with dim prospects for a sharp recovery in 2021,” S&P said.

The Covid-19 pandemic had worsened an already difficult economic and business environment for the automotive sector.