Rating Release
Agusto & Co. affirms the “A-” rating assigned to UAC of Nigeria PLC
The rating expires on 30 June 2024.
Agusto & Co. affirms the “A-” rating assigned to UAC of Nigeria PLC (“UACN”, “the Holding Company” or “the Company”). The rating reflects UACN’s adequate working capital upheld by its lean operating structure and low leverage supported by its strong equity funding buffer. The rating further considers the Company’s diversified portfolio of subsidiaries and associates and long track record of operations in various sectors of the Nigerian economy, as well as its qualified and experienced management team. The rating is however constrained by the adverse impact of the various macroeconomic headwinds on UACN’s portfolio entities amid cost escalations and thinning margins, with an attendant impact on dividend pay-outs. Furthermore, the rating is tempered by the high level of intercompany receivables which affects the Holding Company’s cash flow position. In arriving at the assigned rating, we have assessed the financial condition of UACN (the Holding Company) as a separate entity. Agusto & Co. did not appraise the performance of UACN Group, which consists of the Holding Company and seven subsidiaries and associate companies.
UAC of Nigeria PLC is the Holding company of UAC Group. The Company has a well-diversified portfolio of subsidiaries and associates with strong brands across key industries in Nigeria, including animal feeds and other edibles; paints; packaged food and beverages; quick service restaurants; logistics and real estate. UACN carries out no trading activities on its own but generates revenue primarily from dividends, interest income on non-equity investments, rental charges on investment properties and management fees.
The opinions expressed in this rating release do not represent any investment or other advice and should therefore not be construed as such. Visit www.agusto.com for further information.
