S&P snips Obol Energy

S&P said it lowered its ratings on Obol France 3 SAS and its €816 million term loan due December 2025 to B- from B.

“Fiscal 2024 results will likely fall behind our expectations as Obol struggles to counter a faster-than-expected drop in mortality post-Covid-19. Contrary to our expectations, sales declined 2.8% during the first six months of fiscal 2023 as 7.1% lower funeral volumes outstripped higher selling prices–carry over effect of pricing rounds over the past two fiscal years–and higher tariffs from the crematorium management unit.

The agency added, “We see limited EBITDA and FOCF growth in fiscal 2025 due to declining mortality and competitive pressures hindering market share recovery. For fiscal 2025, we see approximately 2% revenue growth, mainly supported by surgical pricing initiatives within its high-end brands, higher fees from its crematorium management business, and a recovery in the monuments division, more than offsetting slightly lower funeral volumes.”

S&P said it sees adjusted leverage expected to remain near 8x by fiscal year-end 2025, which will increase the refinancing risk on its loan.

The outlook is stable.

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