JLR promises improved Q4 results after S&P cuts rating

Tata Motors UK unit Jaguar Land Rover expressed disappointment over the move by credit rating agency S&P to downgrade its debt rating, and promised better results for the ongoing quarter.

“The company is disappointed by S&P’s decision to downgrade Jaguar Land Rover now.

“The company reaffirms that it expects improved financial results in the fourth quarter period to March 31 , 2019, compared to the first nine months of the financial year, with significant positive cashflow in the fourth quarter,” it said in a statement today.

“Jaguar Land Rover is continuing to execute its product plans and Project Charge turnaround strategy to deliver £2.5 billion of cashflow improvements by March 2020,” it added.

S&P, one of the two main rating agencies in the world, downgraded the company’s debt to B+ from BB- and kept it on a ‘negative’ ratings watch due to the rising likelihood of a ‘no deal’ exit for Britain from the European Union.

In its commentary, the agency said further cuts cannot be ruled out.

“The ongoing CreditWatch reflects that JLR needs to have a strong finish to fiscal year 2019 in order to maintain a ‘B+’ rating, while macroeconomic and geopolitical risks to JLR’s business, such as a potential no-deal Brexit and/or US tariffs, remain high,” it said.

JLR is one of the biggest export-based industries in the UK, and gets the majority of its revenue from outside the country.

The luxury automaker has not had the best of years so far due to uncertainty over a Sino-US trade war, brexit and new emission norms in Continental Europe.

CARE Ratings, based in India, too had cut the rating of JLR parent Tata Motors earlier this month over similar concerns.