...- Weak earnings growth has hampered Recycle and Resource Operations Pty Ltd.'s (Bingo) deleveraging efforts, and a challenging construction outlook is likely to see leverage remain elevated for the next two years. Although the company is increasing earnings, its free operating cash flow (FOCF) remains negative, thereby causing a cash burn that is squeezing liquidity. - We anticipate that S&P Global Ratings-adjusted debt to EBITDA at the Australia-based waste management company will remain above 9x for fiscal 2024 (ending June 30) and above 7x in fiscal 2025. - On April 16, 2024, we lowered our issuer credit rating on Bingo to 'B-' from 'B'. At the same time, we lowered the issue credit rating on the company's term-loan B (TLB) facilities to 'B-' from 'B' (recovery rating: '3'). We now consider liquidity to be less than adequate. - The negative outlook reflects our view that the company is reliant on executing various capital management initiatives, which are currently well progressed, to...
