S&P lowers Planasa view to negative

S&P said it revised the outlook on Placin Sarl (Planasa) to negative and affirmed the B ratings.

The agency said it could lower the rating if EBITDA interest coverage approached 2x or if free operating cash flow turns negative.

Planasa's 2018 profitability appears to be trending lower than the base case due to operational problems, S&P said.

The agency said it thinks Planasa will report adjusted EBITDA at 20% to 21% over the next 12 months versus a high 30% in the previous base case.

Visibility on free operating cash flow generation also was decreased, S&P said.

The agency said it sees neutral free operating cash flow due to higher working capital swings than anticipated.

Planasa is subject to intense working capital swings, stemming from the differing harvesting periods and payment dynamics of strawberries and raspberries, as well as the substantial expansionary capital expenditure that weighs negatively on its cash generation, S&P said.

Still, the company continues to benefit from robust profitability for an agribusiness company, the agency said.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.