Rating Release
Agusto & Co. hereby affirms the “Bbb-” rating assigned to Coleman Technical Industries Limited with positive outlook
The rating expires on 30-06-23
Agusto & Co. hereby affirms the “Bbb-” rating assigned to Coleman Technical Industries Limited (“Coleman Wires & Cables”, “CTIL” or “the Company”). The rating reflects notable improvement in the Company’s earnings and cash flow positions supported in part by the sustained demand for its products as well as the positive effect of its hedging strategy against input price risk on cost of sales and margins. The rating further considers CTIL’s leading position in the Nigerian Wire and Cable Industry as well as its expanding product portfolio and distribution network. However, the rating is constrained by the Company’s high leverage and concentrated ownership structure. The rating is further moderated by the vulnerability of CTIL’s future earnings to macroeconomic headwinds given the undue exposure of its production process to foreign currency risk.
Coleman Technical Industries Limited is a leading cable manufacturer and distributor in Nigeria. The Company has over 30 main products across the power, control, aerial, submersible, communication and other specialty cable categories with an extensive distribution network across Nigeria and some markets in West Africa. Coleman Wires & Cables operates three factories located in Arepo and Sagamu with annual installed production capacities of 60,000 metric tons of copper and 40,000 metric tons of aluminum conductors. These factories operate at an average capacity utilization of about 60% per annum as at FYE 2021.
The opinions expressed in this rating release do not represent investment or other advice and should therefore not be construed as such. Visit www.agusto.com for further information.
