Technicolor has responded to Moody’s decision to downgrade its financial rating from B2 negative outlook to B3 negative outlook.
The company acknowledged cash flow problems in the first half of 2019 but disagreed with Moody’s forecast of a weakening macroeconomic environment in production services activities justified by Deluxe Entertainment’s recent bankruptcy.
Technicolor stated that its profitability and cash flow generation in the second half of 2019 will improve significantly, supported by a catch-up effect in both production services and connected home activities.
“Regarding the production services activity, Technicolor delivered a growth of c.10 per cent in the first half of 2019 maintaining its global leadership position in visual effects for films, episodic and advertising,” Technicolor said in a statement.
“This very dynamic market is driven by, among other things, the launch of numerous new streaming services. Technicolor is well engaged in responding to the opportunities arising out of this changing market.”
Technicolor will publish its third quarter trading update on 5th November 2019.