Moody’s revises Globo outlook to stable

Moody’s Ratings said it revised its outlook for Globo Comunicacao e Participacoes SA to stable from negative and affirmed its Ba2 ratings on the company and its senior unsecured global notes.

“The change in outlook to stable from negative reflects the improvements in Globo's operating metrics, particularly evident in the recovery of EBITDA, as well as operating and EBITDA margins. The resumption of positive free cash flow generation in 2023 also contributes to this positive change,” Moody’s said in a press release.

The agency said it estimates 2024 revenues to stay stable compared to 2023, at around R$15.3 billion. Operating margins are also expected to widen to 6%, compared to 5% in 2023 and -3.2% in 2022. Moody's Ratings-adjusted two-year average gross leverage should continue to gradually decline to close 2024 at 2.5x, compared to 3.1x in 2023 and 6.6x in 2022. Additionally, the company's two-year average interest coverage (measured as [EBITDA-capex]/interest expense) should increase to 5.5x, from 4x in 2023.

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