S&P turns Archroma outlook to negative

S&P said it changed its outlook for Archroma Holdings Sarl to negative from stable but affirmed the B issuer rating and B+ ratings on the company’s term loans.

“Archroma has delivered weaker than anticipated results in fiscal 2023 and we anticipate the environment to remain challenging in fiscal 2024. Archroma's reported EBITDA declined to about $89 million in fiscal 2023 from $147 million, despite the contribution from Huntsman TE starting March 2023. The company's margins were below our expectations due to weaker economic conditions that led to a drop in demand for brand and performance textile specialties,” S&P said in a press release.

S&P warned it could lower Archroma’s ratings a notch unless Archroma generates healthy free operating cash flow or improve its funds from operations cash interest coverage comfortably above 2x.

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