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C.H. Robinson gets an upgrade at S&P Global, reduced headcount a key reason
C.H. Robinson gets an upgrade at S&P Global, reduced headcount a key reason

Yahoo

time16 hours ago

  • Business
  • Yahoo

C.H. Robinson gets an upgrade at S&P Global, reduced headcount a key reason

C.H. Robinson is back to its long-time debt rating of BBB+ from S&P Global Ratings, after about 15 months at a level one notch below that. The ratings agency on Wednesday increased the rating of the giant 3PL by one notch to BBB+. It had cut that rating to BBB in May 2024, after the company had held a BBB+ since at least 2018. But the May reduction came right about the same time that C.H. Robinson (NASDAQ: CHRW) was beginning its turnaround, at least as far as its earnings demonstrated. A strong first quarter 2024 report sent the company's stock price soaring, and that has been followed by continuing solid financial reports and a rise in its stock price of about 73% since the end of April 2024. The stock is up almost 24% just in the last month. The S&P Global (NYSE: SPGI) rating is considered one notch above the Moody's (NYSE: MCO) rating of Baa2 for C.H. Robinson. Moody's affirmed that rating in late June. Both ratings are in investment-grade territory. Headcount cuts came faster than expected Geoffrey Wilson, the San Francisco-based S&P Global analyst who conducted the analysis leading to the C.H. Robinson upgrade, said the relatively quick turnaround in C.H. Robinson's fortunes owed to several developments. But one stood out. 'One is that they significantly and very quickly rightsized their head count,' Wilson said in an interview with FreightWaves. Wilson said many 3PLs, during the post-pandemic freight boom of 2022, were facing 'rising rates that made for some good times.' 'And what we saw were a lot of companies that wanted to take advantage of the good times and maybe take a disproportionate piece of market share that was growing there,' Wilson said. That push came with adding headcount. But the problem these companies encountered when the good times slowed is that they were dealing with a new capital structure that was now facing low freight rates and rising interest rates. 'The capital structure was completely different from how they foresaw the next two years,' Wilson added. Wilson alluded to last year's S&P Global downgrade of C.H. Robinson and its proximity to the evidence of a turnaround. 'When we ultimately downgraded them, it was early days of the head count restructuring but we just didn't see how it could be done quick enough to give them the sources of liquidity needed,' he said. At C.H. Robinson, Wilson said, executives were saying on earnings calls as early as the fourth quarter of 2022 that cutbacks were likely. 'What we've seen since then is a very quick headcount restructuring that to this day is still going on,' Wilson said. The S&P Global report notes that personnel expenses at C.H. Robinson have dropped 19% since a fourth quarter 2022 peak. Average headcount is down 27% since then. Ultimately, ratings agencies rely on numbers in deciding whether to upgrade, downgrade or hold steady a company's debt rating. In its release announcing the change, S&P Global said the metric of funds from operations to debt at C.H. Robinson has been above 45% since the fourth quarter of 2024, a key metric. The ratings agency said it expects C.H. Robinson to sustain that coverage at 'well over' 45%,'which comfortably exceeds our previous upside threshold for our rating.' That metric was another key number that led to the upgrade, S&P Global said. Debt load is reduced Another development cited by S&P Global was debt redemption by C.H. Robinson. The ratings agency said the 3PL has fully repaid a $141 million balance on its revolving credit facility and reduced its borrowing under an accounts receivable lending facility by $70 million. Other metrics cited by S&P Global are efficiency-driven. For example, the agency said, shipments per person per day 'have grown at a double digit percentage for over two years, supported by automation and digital capabilities.' The upgrade came with an outlook of stable. A stable outlook means conditions are such that an upgrade or downgrade in the short to medium term is not likely; C.H. Robinson had a negative outlook prior to its 2024 downgrade. 'The stable outlook reflects our view that operational efficiencies gained over the past few years can offset potential industry headwinds arising from trade policy uncertainty,' the report said. It added that S&P Global expects the FFO to debt metric to be in the mid 50% range for this year. In a prepared statement, C.H. Robinson said the upgrade 'reflects the meaningful progress we've made in strengthening our financial profile, driven by disciplined capital allocation, sustained market outgrowth, margin expansion and productivity improvements, and a resilient operating model. Despite persistent freight market headwinds, our strong business performance and focus on operational improvement initiatives have enabled us to maintain healthy leverage ratios and consistent cash flow, which S&P recognized as key contributors to our improved credit standing.' The increase in C.H. Robinson's debt rating is particularly notable given what has happened to the debt ratings of the small group of other 3PLs that have publicly-traded debt. RXO (NYSE: RXO) was cut by S&P Global to BB, a non-investment grade rating, in May 2024. Echo Global Logistics has been at B- since October 2023. Odyssey Logistics' move to a B- rating took place in early June. More articles by John Kingston TQL takes its loss in a broker liability case to the Supreme Court 'Impossible position' cited by truck manufacturers in lawsuit against California In brief comments, Trimble CEO introduces new product for matching capacity with shippers The post C.H. Robinson gets an upgrade at S&P Global, reduced headcount a key reason appeared first on FreightWaves. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data

S&P raises India's credit rating to BBB in first upgrade for 18 years
S&P raises India's credit rating to BBB in first upgrade for 18 years

The National

time2 days ago

  • Business
  • The National

S&P raises India's credit rating to BBB in first upgrade for 18 years

S&P Global Ratings upgraded India 's long-term sovereign crediting rating to "BBB" from "BBB-" on Thursday, owing to the country's fiscal consolidation, credible monetary policy and strong economic growth. It was India's first upgrade in 18 years. 'The upgrade of India reflects its buoyant economic growth, against the backdrop of an enhanced monetary policy environment that anchors inflationary expectations,' S&P Global analysts wrote. "Together with the government's commitment to fiscal consolidation and efforts to improve spending quality, we believe these factors have coalesced to benefit credit metrics." S&P also raised India's short-term ratings to "A-2" from "A-3", adding that the outlook on the long-term rating is stable. It also revised its transfer and convertibility assessment to "A-" from "BBB+". India's Ministry of Finance said it welcomed S&P's decision to upgrade the country's credit rating. The ratings agency said India's economy had a 'remarkable comeback' from the Covid-19 pandemic, with real GDP growth averaging 8.8 per cent over the 2022 fiscal year to the 2024 fiscal year, the highest in the Asia-Pacific. Analysts said they expect GDP to increase 6.8 per cent annually over the next three years. 'India remains among the best performing economies in the world,' S&P Global said. S&P Global also expects the effects of the US tariffs on India's economy 'will be manageable', noting that about 60 per cent of its growth comes from domestic consumption. US President Donald Trump last week doubled India's tariff rate to 50 per cent because of its continued imports of Russian energy. 'We expect that in the event India has to switch from importing Russian crude oil, the fiscal cost, if fully borne by the government, will be modest given the narrow price differential between Russian crude and current international benchmarks,' analysts wrote. Analysts also anticipated that, factoring in sectoral exemptions on pharmaceuticals and consumer electronics, the exposure of Indian exports that would be subjected to tariffs at 1.2 per cent of GDP. While this could lead to a one-off hit to growth, S&P does not anticipate it will hurt India's long-term growth prospects. S&P also projected a general government deficit of 7.3 per cent of GDP in the 2026 fiscal year to fall to 6.6 per cent by to the 2029 fiscal year. It also anticipates the country's debt-to-GDP ratio to fall to 78 per cent by the 2029 fiscal year. S&P said it may lower the ratings if it finds weak political commitment to consolidated public finances. It may raise the ratings if fiscal deficits narrow in a way that would lower the general government debt below 6 per cent of GDP on a structural basis.

Kuwait PMI rises to 53.5 in July, signaling an improved business environment
Kuwait PMI rises to 53.5 in July, signaling an improved business environment

Zawya

time06-08-2025

  • Business
  • Zawya

Kuwait PMI rises to 53.5 in July, signaling an improved business environment

KUWAIT CITY: The Purchasing Managers' Index (PMI) for Kuwait rose to 53.5 in July, up from 53.1 in June, marking a notable improvement in the non-oil private sector's performance. This increase reflects strengthened business conditions and continued expansion for the 11th consecutive month, according to the latest data released by S&P Global Ratings on Tuesday. The PMI, a composite indicator tracking the performance of Kuwait's non-oil private sector, showed that the sector has remained firmly in growth territory throughout July. The improvement was driven by a sharp acceleration in new orders, which helped extend the expansion period that began in February 2023. The key driver of the recent PMI increase was a significant rise in new orders, signaling that demand for goods and services continues to grow. Despite the surge in new orders, employment levels remained steady, following a record high in the previous month. This stability in workforce numbers was largely attributed to companies' cautious approach to hiring, with some firms reluctant to take on additional staff due to cost concerns and efforts to complete ongoing projects on time. While new export orders saw growth, the pace of expansion slowed to a three-month low, with businesses attributing the increase to advertising efforts and price discounts. Inflationary pressures showed signs of easing at the beginning of the third quarter, which was welcomed by businesses. However, the increase in new orders led to a resurgence in backlogs, as companies struggled to meet demand while maintaining stable staffing levels. Despite the rise in backlogs, the pace of increase remained modest and the weakest observed since January. In response to heightened competition, many firms were forced to implement price cuts to secure new orders. These efforts helped to contain input costs and limit the extent to which higher costs were passed on to customers. Looking ahead, companies remained optimistic about future business prospects, with many expecting production to increase over the next year. However, confidence levels in the near term dipped to a three-month low, primarily due to the slow pace of hiring. Firms are focusing on diverse marketing strategies, including the use of digital channels, to maintain their competitive edge and support long-term growth. Andrew Harker, Director of Economics at S&P Global, commented on the survey results, stating that Kuwait's non-oil private sector began the second half of 2025 similarly to how it finished the first half, with strong growth in output and new orders. He highlighted that while employment remained largely unchanged, the sector's continued expansion is promising for future business growth. Harker also noted that companies were relieved by the easing of inflationary pressures but pointed out that hesitation to hire had led to an increase in backlogs of work. He expressed optimism that the ongoing growth in new business would eventually lead to a renewed hiring trend. The July PMI results for Kuwait's non-oil private sector reflect a period of sustained growth, driven by an increase in new orders and overall business activity. While inflationary pressures have eased, challenges remain in terms of staffing and managing backlogs. Looking forward, there is cautious optimism that the sector will continue to expand, with increased hiring expected in the coming months. Arab Times | © Copyright 2024, All Rights Reserved Provided by SyndiGate Media Inc. (

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