Antolin - comment

The company performed better than model in Q1. Revenues were lower, but management had been renegotiating supply contracts, which is beginning to show in margins. Guidance for the year remains unchanged, with a hint that margins will fall again, even as they should retain some of the improvements. Also, Q2 seems to be going softly since tariffs were enforced. The tariffs should primarily manifest themselves via lower demand volumes than direct costs Antolin would have to swallow. Management denied they see the company breaching covenants, even though leverage is now at 3.4x vs. 3.5x and continues rising. The reason must be that the company is working on a series of transactions that will be announced one by one if and when successful in H225. Without those, we think the Q2 covenant is beyond reach.