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View of E-mart in downtown Seoul (photo = E-mart) |
[Alpha Biz=(Chicago) Reporter Paul Lee] Nice Credit Ratings said on the 22nd that it has lowered E-Mart's long-term credit rating from AA to AA-.
As for the reason for the rating adjustment, NICE Investors Service said, "The development of investment performance in the e-commerce sector is being delayed amid weakening business competitiveness in the offline retail distribution sector."
"Korean households are expected to maintain their consumption capacity in the face of the economic downturn, and intensifying competition with online channels are expected to serve as a mid- to short-term burden on the company's flagship online and offline retail distribution business," Nice Credit Rating added.
E-Mart has recently seen its profitability decline due to high costs in the e-commerce sector and poor performance in the construction sector.
According to Nice Credit Rating, the sales index compared to the pre-amortization operating profit (EBITDA) was 5.3% last year, down from a year earlier. It has also been hit by the closure of E-Mart's Seongsu and Gayang branches and a slowdown in Traders' earnings, which have a high proportion of offline operations.
In the e-commerce sector, the operating loss trend continues due to price discounts and marketing burdens caused by competition in the industry.
Alphabiz Reporter Kim SangJin(hoondork1977@alphabiz.co.kr)
