S&P moves Elsan view to negative

S&P said it revised its outlook for Elsan SAS to negative from stable and affirmed its B+ issuer rating.

“The negative outlook reflects our expectation that Elsan's credit metrics will remain under pressure through 2023, in light of tough operating conditions for French private hospital operators. We believe that inflationary pressures, continued staff shortages, and absenteeism will weigh on Elsan's profitability in 2022 and 2023, despite an expected recovery in volumes,” S&P said in a press release.

Elsan plans to implement an efficiency plan to offset higher costs, including renegotiating supplier contracts, decreasing activity in some therapeutic areas, or closing unprofitable clinics and reducing energy consumption, S&P said.

The said it sees the group's adjusted EBITDA margin staying below 18% in 2022 and 2023, translating into adjusted leverage close to 7x, above its previous base case of closer to 6.5x.

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