Moody’s moves Agrosuper view to negative

Moody’s Investors Service said it changed its outlook for Agrosuper SA to negative from stable and affirmed its Ba1 corporate family and senior unsecured ratings.

“The outlook change to negative reflects Agrosuper's subpar financial results over the first nine months of 2023, and Moody's expectation that persistent weak market fundamentals may keep credit metrics strained over the next 12 months.

“In particular, Agrosuper's exposure to volatility in commodity prices and the overall protein industry, which is subject to risk factors such as weather conditions, diseases, supply imbalances and global trade variables, may pose a barrier to Agrosuper's profitability recovery, which in turn may hinder the company's ability to reduce its leverage metrics to levels more consistent with its Ba1 ratings,” the agency said in a press release.

Moody’s added it forecasts an improvement in Agrosuper's performance in Q4 2023.

“By the end of fiscal year 2023, Moody's expects Agrosuper to have a debt to EBITDA ratio of around 4.6x (4.1x on a net debt basis). Moody's also expects the company's profitability to continue to recover in 2024, with an EBITDA margin of around 12.5%, which in turn would allow Agrosuper to reduce its indebtedness and leverage to approximately 2.5x-3x by the end of fiscal year 2024,” the agency said.

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