Fitch Ratings revised Archer-Daniels-Midland's Outlook to Negative from Stable on December 12, 2024, while affirming all ratings, including its Long-Term Issuer Default Rating, at 'A'. The revision reflects increased management and corporate governance risks.
Fitch cited ADM's discovery of additional misclassified intersegment transactions in Q3 2024, which stemmed from internal control weaknesses and necessitated restatements for 2023, Q1 2024, and Q2 2024. These issues create uncertainty regarding further potential errors and the resolution timeline of governmental investigations.
The Negative Outlook also considers Fitch's projection of ADM's RMI-adjusted EBITDA leverage reaching nearly 2.0x in 2024. This increase is attributed to moderating EBITDA and over $2 billion in higher debt from acquisitions and aggressive share repurchases, compared to leverage under 1x in prior years.
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