Rating Release
Agusto & Co assigns an “A-” rating to TotalEnergies Marketing Nigeria PLC
The rating expires on 30 June 2024.
Agusto & Co assigns an “A-” rating to TotalEnergies Marketing Nigeria PLC (“TotalEnergies”, “TEMN PLC” or “the Company”). The rating reflects our opinion on the Company’s good financial condition evidenced by healthy earnings and cash flows despite the challenging operating environment. The rating also considers TotalEnergies’ expanding retail footprint as well as the positive impact of its foreign exchange hedging strategy and the recent petroleum product pricing reforms in Nigeria on its future earnings. TEMN PLC’s credit quality is further enhanced by the strong support from TotalEnergies S.E., its ultimate parent, based on the latter’s financial strength and credit ratings (Standard & Poor’s A+ and Moody’s A1). However, the rating is constrained by TotalEnergies’ working capital challenges on the back of increased investments in trading assets accentuated by the persistent depreciation of the naira and worsening forex shortages. This is in addition to the expected decline in sales volume as consumers adjust to the new market reality, as well as the unresolved industry-wide challenges of product availability and price ceiling, which have continued to stymie growth. Also, the ongoing energy transition in line with global trends remains a threat to the Company’s future revenues from fuel.
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.
