S&P cuts Kersia

S&P said it lowered its ratings on Kersia International SAS and its €420 million term loan to B- from B. The loan’s 3 recovery rating is unchanged.

“We anticipate that Kersia's profitability and debt leverage will weaken further in fiscal 2022, after a subdued performance in 2021, owing to sizable integration costs, the impact of Covid-19 on the activity and already some inflationary pressures. We expect 2022 earnings to be significantly dented by the marked acceleration of inflation in raw material and freight costs. We expect the company's EBITDA margin dropping by around 100 basis points (bps) compared with 2021, which was already depressed, 350 bps below 2020,” the agency said in a press release.

S&P said it forecasts Kersia’s S&P Global Ratings-adjusted leverage to increase to 9x-10x in 2022, before retreating to 7x-8x in 2023.

The outlook is stable.

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