Fitch upgrades Tereos

Fitch Ratings said it upgraded Tereos SCA's long-term issuer default rating to BB from BB-. The agency simultaneously raised Tereos Finance Groupe 1’s senior unsecured rating to BB- from B+. The recovery rating is RR5.

“The IDR upgrade reflects the sustainability of a large part of the improvements achieved in leverage and in profitability in FY22 (ended March 2022), despite the likelihood of currently high sugar, ethanol and starch prices normalizing over time.

“This takes into account increasing vertical integration in Brazil, the company's strategic shift for the starch and sweeteners division towards a stronger focus on profitability, and at the European operations, a flexible cost structure with a flexible pricing mechanism with beetroot member suppliers, which enables Tereos to protect profits in the event of sugar price declines,” Fitch said in a press release.

The outlook is stable.

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