S&P changes Adler Pelzer view to negative

S&P said it revised its outlook for Adler Pelzer Holding to negative and affirmed its B+ ratings on the company and its secured bond.

Adler Pelzer reported weaker profitability in 2019 and S&P said it expects only small improvements over the next few quarters. Profitability has further weakened over the past quarters mostly due to a weaker auto market and changes in the company’s product mix. In the first nine months ended Sept. 30, its reported EBITDA margins declined to 7.4% compared with 9% last year.

“The negative outlook reflects the one-in-three likelihood of a one-notch downgrade over the next 12 months if Adler Pelzer cannot maintain EBITDA margins of 8%-10% in 2020 or if it fails to generate positive free operating cash flows,” the agency said in a press release.

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