Rating Release 

Agusto & Co. assigns “Bbb” (long-term) and “A2” (short-term) ratings to Layer3 Limited, with a stable outlook. 

The rating expires on 30 June 2027. 

Agusto & Co. hereby assigns “Bbb” (long-term) and “A2” (short-term) ratings to Layer3 Limited (“Layer3” or “the Company”). The ratings reflect Layer3’s diversified revenue streams across enterprise solutions, connectivity, cloud services, managed services and fibre-to-the-home (FTTH), which have supported growth in earnings and cash flows. The ratings also consider the Company’s growing recurring revenue base, driven by increasing subscriber penetration and management’s strategy to introduce subscription based components across enterprise offerings and bundled multi-service solutions to improve customer retention and revenue predictability. In addition, Layer3 benefits from an adequate liquidity profile, satisfactory working capital position and access to diversified funding sources, including original equipment manufacturers (OEM) credit arrangements and concessionary funding. The ratings are, however, constrained by the Company’s exposure to foreign exchange risk stemming from imported technology infrastructure, earnings concentration in non-recurring enterprise solutions, execution risk associated with infrastructure expansion, and the potential for increased leverage with planned commercial paper issuances.

Layer3 Limited is an Information and Communications Technology (ICT) and digital infrastructure solutions company established in 2005, with operations spanning enterprise technology solutions, connectivity, cloud services, managed services and fibre infrastructure. The Company’s core business is centered on the delivery of integrated technology solutions to corporate, public sector, SME and retail customers across Nigeria, leveraging its technical capabilities and strategic partnerships with global technology providers. Layer3 operates predominantly a business-to-business model, serving enterprise and institutional customers, but is gradually expanding its business-to-consumer presence through its fibre-to-the-home (FTTH) offerings. The Company generates revenues from a mix of recurring and non recurring offerings, with recurring revenues derived from subscription-based contracts and non-recurring revenues largely from enterprise deployments and project-based engagements. Over the medium term, Layer3 intends to increase the contribution of recurring revenues through bundled multi-service offerings and continued growth across its cloud, connectivity and managed service platforms.