S&P eyes Port of Newcastle positively

S&P said it changed its outlook for Port of Newcastle Investments (Financing) Pty Ltd. (PONF) to positive from stable and affirmed its BB+ issuer and issue ratings. It also affirmed the 3 recovery rating on the company’s senior secured debt.

Higher wharfage charges and cost-saving initiatives will help buoy PONF’s 2024 cash flow, the agency said.

“We anticipate a steady improvement in PONF's ratio of funds from operations (FFO) to debt to about 6.4% in fiscal 2024 and 12.2% in fiscal 2025 (from 5.9% in 2023). The ability to deliver these improved metrics will depend on ongoing cost discipline, capital expenditure (capex), and the level of shareholder distributions,” S&P said in a press release.

The agency noted it could upgrade PONF’s ratings if it were to operate with an FFO to debt at over 7.5% on a sustained basis with policies committed to supporting these metrics.

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