Bulletin: Archer Daniels Midland Still Expected To Reduce Leverage By 2020 Despite Near-Term Operating Headwinds

NEW YORK (S&P Global Ratings) Nov. 4, 2019--S&P Global Ratings today said that it still expects Archer Daniels Midland Co. (A/Stable/A-1) to reduce leverage after the company's earnings announcement for the third quarter ended Sept. 30, 2019. The company cited continued near-term operating challenges but an improving operating outlook for 2020, particularly in its Nutrition segment where the company has been acquisitive. We continue to expect debt to EBITDA will remain near 2.5x—which is high for the rating—over the next couple of quarters because of recent challenging business conditions in its Carbohydrates Solutions and Agricultural Services segments and higher debt levels after the roughly $2 billion Neovia acquisition in the first quarter of 2019. By fiscal-year 2020, we expect leverage

...NEW YORK (S&P Global Ratings) Nov. 4, 2019--S&P Global Ratings today said that it still expects Archer Daniels Midland Co. (A/Stable/A-1) to reduce leverage after the company's earnings announcement for the third quarter ended Sept. 30, 2019. The company cited continued near-term operating challenges but an improving operating outlook for 2020, particularly in its Nutrition segment where the company has been acquisitive. We continue to expect debt to EBITDA will remain near 2.5x--which is high for the rating--over the next couple of quarters because of recent challenging business conditions in its Carbohydrates Solutions and Agricultural Services segments and higher debt levels after the roughly $2 billion Neovia acquisition in the first quarter of 2019. By fiscal-year 2020, we expect leverage will improve closer to 2x based on our expectations performance will remain strong in the Nutrition segment. Coupled with rebounding margins in Crush and Starches and Sweeteners, this should offset...

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