S&P revises Dedalus outlook to negative

S&P said it revised its outlook for Dedalus Healthcare Systems Group SpA and Dedalus Finance GmbH to negative from stable and affirmed the B- ratings on the companies and their senior secured debt, which was issued through Dedalus Finance.

“The outlook revision reflects the risk that Dedalus' free cash flow could remain negative for a prolonged period. We expect the company's FOCF will remain weak for longer than we previously expected and see a risk that Dedalus might not be able to generate at least breakeven FOCF by 2024.

“While we expect EBITDA margins will improve over the next 12-24 months, the increase in the company's cash flows from operations will be fully absorbed by increased interest payments of €90 million-€95 million in 2023-2024, up from €55 million in 2022, and sizeable capital expenditure (capex) of about €75 million, mostly containing capitalized investments in Dedalus' research and development (R&D) projects,” S&P said in a statement.

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