TSC Ratings' Updates: NuStar

The following ratings changes were generated on Monday, Jan. 12.

We've downgraded Braksem(BAK Quote), an integrated petrochemical cracker and thermoplastics producer in Brazil and Europe, from hold to sell, driven by its deteriorating net income, generally weak debt management, disappointing return on equity, weak operating cash flow and poor profit margins.

Net income decreased from $83.3 million in the year-ago quarter to -$491.2 million. The debt-to-equity ratio of 1.7 is quite high overall and compared with the industry average, and the 0.8 quick ratio is poor, illustrating an inability to avoid short-term cash problems. Return on equity has greatly decreased since the year-ago quarter, underperforming both the industry and the S&P 500. Net operating cash flow fell 21.2% to $186 million, and Braksem's gross profit margin of 19.4% is rather low, though it did increase from the same period last year. The company's net profit margin of -28.2% significantly underper4formed the industry average. ...