Rating Release 

Agusto & Co. assigns “Bbb-” (long-term) and “A3” (short-term) ratings to Cardinal Torch Company Limited, with a stable outlook. 

The rating expires on 30 June 2027. 

Agusto & Co. hereby assigns “Bbb-” (long-term) and “A3” (short-term) ratings to Cardinal Torch Company Limited (“Cardinal Torch”, “CTCL” or “the Company”). The ratings reflect CTCL’s expanding operations in Nigeria’s agricultural commodity trading value chain, particularly in cocoa bean exports. This growth is supported by a disciplined pricing framework and well-established supplier and buyer networks, which have consistently underpinned healthy earnings performance. The ratings also take into account the Company’s adequate liquidity profile, characterized by a relatively efficient cash conversion cycle, and prudent use of structured trade finance facilities to manage its working capital-intensive operations. In addition, the Company’s strategic expansion into higher margin value-added segments, specifically raw cashew nut (RCN) and soybean processing, offers the prospect of enhanced earnings diversification and improved profitability. However, the ratings are moderated by CTCL’s recurring short-term working capital deficits, high dependence on short-term borrowings, exposure to commodity price volatility and the potential leverage pressure associated with planned debt-funded expansion projects.

Cardinal Torch Company Limited is an agricultural commodity trading and agro-processing company established in 2020, with operations spanning sourcing, aggregation and warehousing. The Company’s core business is currently anchored on the export of cleaned and dried cocoa beans, leveraging its strategically located warehouse facilities in Lagos, Cross River and Taraba States, as well as extensive supplier networks across Nigeria. Cardinal Torch primarily supplies international commodity buyers and trading houses under business-to-business contractual arrangements, with sales largely denominated in United States Dollars (USD) and executed on structured export terms. The Company is expanding into value-added activities through soybean and ready-to-eat cashew nut processing, which is currently undertaken through a contract manufacturing arrangement with a third-party firm while construction of its in-house processing facility progresses.