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Published on 5/24/2023 in the Prospect News Bank Loan Daily, Prospect News High Yield Daily and Prospect News Liability Management Daily.

Adevinta cuts debt ratio down to 3.4x, aims for below 3x by year-end

By Devika Patel

Knoxville, Tenn., May 24 – Adevinta ASA generated strong cash last quarter allowing management to pay back €80 million of debt and reduce the company’s net debt-to-EBITDA leverage ratio to 3.4x at quarter-end with high liquidity.

The company aims to get its leverage ratio down below 3x by the end of the year.

“Overall, we delivered strong financial performance with 15% growth in total revenue in core markets,” chief executive officer Antoine Jouteau said on the company’s first quarter ended March 31 earnings conference call on Tuesday.

“This has resulted in strong cash generation, allowing us to further deleverage the business and to pay down debt again this quarter,” Jouteau said.

“In the quarter, we managed to pay back €80 million of our long-term loan,” chief financial officer Uvashni Raman said on the call.

“This is in accordance with our financial policy and associated leverage targets and in line with our prioritization strategy around reduction of floating debt repayment.

“At the end of the quarter, our senior secured leverage ratio was at 3.4x.

“We will continue to focus on deleveraging and will further optimize our debt structure to mitigate the impact of rising interest rates.

“We reconfirm our target to reach a reduced leverage ratio of below 3x net debt-to-EBITDA by the end of fiscal year 2023,” Raman said.

The company has no debt due until late 2025 and may take advantage of market conditions to further reduce its exposure to floating interest rates.

“Looking now at our debt maturity profile, we also have some ways to go before the maturity of our debt, so, we do not have to repay debt before November 2025,” Raman said.

“With this strong position and a good balance between investment and cost control, we believe we have the right ingredients to take advantage of market upswings or have the levers to pull if further deterioration in market conditions occur.

“We continue to reduce our floating interest rate exposure by prioritizing floating interest rate debt when it comes to deleveraging.

“Our floating to total debt ratio is now at 31% compared to 38% a few quarters ago,” Raman said.

Liquidity is high.

“Liquidity remains strong as our total cash position at the end of the April was €51 million, and we have a further undrawn facility of €450 million,” Raman said.

“We continue to implement cash optimization measures to reduce our operating cash requirements,” Raman said.

Adevinta is an Oslo-based online classifieds company.


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