Rating Release
Agusto & Co. affirms the “A-” (long-term) and “A1” (short-term) ratings assigned to Abuja Steel Mills Limited, with a stable outlook.
The rating expires on 30 June 2026.
Agusto & Co. hereby affirms the “A-” (long-term) and “A1” (short-term) ratings assigned to Abuja Steel Mills Limited (“Abuja Steel Mills”, “ABSM” or “the Company”), reflecting its resilient financial performance and continued ability to generate positive operating cash flows despite mounting raw material and energy cost pressures. The ratings also take into account ABSM’s adequate liquidity, as well as its ongoing strategic initiatives to expand melting and rolling capacity, increase the use of direct reduced iron (DRI) and generate additional power through captive solar facilities to supplement grid supply, which are expected to support cost efficiency and earnings growth over the medium term. The ratings, however, are moderated by the Company’s persistent long-term financing need, as well as concerns over its corporate governance that require further strengthening. This is in addition to the continuous exposure of its future earnings to input price volatility.
Abuja Steel Mills Limited is an integrated steel producer and a member of the African Industries Group (AIG). The Company manufactures steel billets and high-strength reinforcement bars and serves principally the Nigerian construction and infrastructure market from its plant in Suleja, Niger State. As at FYE 2024, ABSM’s installed capacity stands at 263,500 MTPA (melting) and 150,000 MTPA (rolling), and an expansion programme is underway that will increase capacity to 365,500 MTPA (melting) and 350,000 MTPA (rolling) on completion (scheduled for 2026). The Company sells predominately on a B2B basis to major contractors and distributors, with most transactions conducted on a cash or prepayment basis.