S&P: Welch view to negative

Standard & Poor's said it affirmed all of the ratings on Welch Foods Inc., including the A- corporate credit rating.

The agency also revised its outlook to negative.

The outlook revision reflects a belief that 2013 earnings and credit measures will be weaker than the current expectations for the ratings primarily because of a weak 2012 patron grape harvest, S&P said.

The agency said it expects the company to maintain a debt-to-EBITDA ratio of near or below 1.5x to maintain the current ratings.

Spring frosts reduced the cooperative's eastern pool 2012 grape harvest, which is expected to hurt fiscal 2013 sales volume and patron net proceeds, S&P said.

The ratings consider the company's satisfactory business risk profile and modest financial risk profile, the agency said.

Key credit factors in the company's business risk profile include its good brand recognition and leading market positions in grape juice, S&P said.

Negative factors include the company's relatively narrow business focus in the highly competitive shelf-stable juices, the agency said, and the susceptibility of its patron grape suppliers to adverse weather conditions.

© 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.