Moody’s turns Alltech view to negative

Moody’s Investors Service said it changed its outlook for Alltech Inc. to negative from stable and affirmed its B2 ratings.

“The outlook revision to negative from stable reflects Moody's expectation that Alltech's operating performance will remain weak and free cash flow will remain strained in the next 12 months as the company faces volume declines, inflationary headwinds and supply chain challenges,” the agency said in a press release.

Moody’s noted Alltech posted negative $40 million free cash flow for the last 12 months ended June 30.

However, the agency said it affirmed the ratings because Alltech may be able to push its Moody's adjusted debt-EBITDA leverage to under 5x within the next 12 to 18 months through EBITDA growth in 2023 with price increases and if commodity prices continue going down.

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