Nice Credit Rating (NICE) noted on the 11th that it has downgraded the credit rating outlook for Ecopro and ECOPRO BM from 'stable' to 'negative' due to concerns that sluggish business conditions will lead to poor operating results.
NICE explained, "The revenue scale for the entire group, including ECOPRO BM, has shrunk and operating profitability has deteriorated due to decreased sales volume caused by demand weakening in the Chonbang market, and a decline in sales prices due to falling metal prices."
Ecopro's consolidated revenue increased from 702.3 billion won in 2019 to 7.26 trillion won in 2023, but it has shown a downward trend since the second half of 2023. For the provisional results in 2024, it recorded a revenue of 3.1 trillion won, a decrease of 57.2% compared to the previous year, and it is expected that the recovery in revenue will not be significant in 2025.
NICE listed the uncertainty in major market policies and financial instability as key reasons for the rating outlook adjustment.
NICE said, "The European electric vehicle market has seen increased consumer burden for purchasing electric vehicles due to the subsidy abolitions in the UK and Germany in 2023, and France also plans to reduce electric vehicle subsidies in 2025," and noted, "It is expected that policies related to electric vehicles and secondary batteries will change unfavorably after the Trump administration's inauguration."
It also added, "Ecopro's group is facing a high working capital burden during the business expansion process, and a response through external financing is expected with extensive facility investments during periods of declining profitability, leading to an increase in the overall financial burden of the Ecopro group."
NICE has maintained the long-term credit rating of the two corporations at 'A'. The short-term credit rating of Ecopro is also 'A2', while the short-term credit rating of ECOPRO BM was not assessed.