S&P ups Taghleef Industries

S&P said it upgraded its ratings for Taghleef Industries Holdco Ltd. and its loans to BB from BB-.

“Strong performance in 2021 allowed Taghleef to improve it adjusted debt to EBITDA to 1.3x, compared with 2.1x in the previous year. Despite continued disruptions from the Covid-19 pandemic, Taghleef demonstrated very strong performance in 2021, as indicated by 40% revenue growth and an S&P Global Ratings-adjusted EBITDA increase of 47%. While overall volumes remained broadly stable (+0.7%), the volumes of higher margin specialty and value-added products increased 7% and 3%, respectively,” S&P said in a press release.

“We think that the company's average EBITDA margin will return to about 12% in 2022-2023, consistent with historical performance, but that lower working capital requirements compared with 2021 will improve free operating cash flow (FOCF) and further strengthen credit ratios,” the agency said.

The outlook is stable.

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