Magna International Inc. (MGA) recently received an investment-grade rating of “Baa2” for its senior unsecured issuer rating from Moody's Investors Service, the credit rating agency of Moody’s Corporation (MCO).
Moody’s identifies Magna’s vast global presence, strong market share and a solid balance sheet as the primary factors behind the rating. The company has its presence in 25 countries across the world through its 245 manufacturing operations and 80 product development and engineering centers. It is one of the leading manufacturers and suppliers of automotive components in U.S. as well as in Canada.
Recently, Magna reported its 2011 first quarter results that reflect significant improvements over the same period last year. In absolute terms, profits increased 58% to $331 million from $210 million a year ago.
Sales were up 34% to $7.19 billion driven by higher light vehicle production in the company’s two principal markets, North America and Europe. A major part of Magna’s revenues are realized from General Motors Company (GM), Ford Motor Co. (F) and Chrysler.
Magna’s balance sheet is also very strong with minimum debt as of March 31, 2011. As of March 31, 2011, Magna had cash and cash equivalents of $1.57 billion compared with $1.88 billion as of December 31, 2010. Long-term debt stood at $75 million, reflecting a low long-term debt-to-capitalization ratio of 0.87%.
Based in Aurora, Canada, Magna International Inc. designs, develops and manufactures automotive systems, assemblies, modules and components, besides engineering and assembling complete vehicles, primarily for sale to original equipment manufacturers (OEMs) of cars and light trucks. The product portfolio includes automotive interior and exterior systems, seating systems, body and chassis systems, electronic systems, powertrain systems and roof systems.
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