Nutrition Weakness Hits DSM’s Rating

Moody’s Investor Services has downgraded DSM’s credit rating from stable to negative on account of a “significant squeeze” in profitability for the firm’s nutrition business. The change in rating could make it more expensive for DSM to borrow money. A turnaround for the business is unlikely in the medium term, Moody’s states, in part because of growing Chinese competition. Pre-tax profits for the nutrition division dropped 5% to $227 million in the third quarter compared with the year-earlier period, despite a 15% hike in sales to $1.3 billion. DSM’s overall profits increased 2% to $305 million in the quarter on an 8% jump in sales to $2.1 billion.