Rating Release
Agusto & Co. hereby affirms the “Bbb” rating assigned to Saro Agrosciences Limited
The rating expires on 30 June 2024.
Agusto & Co. hereby affirms the “Bbb” rating assigned to Saro Agrosciences Limited (“Saro Agrosciences”, “SAS” or “the Company”). The rating reflects the Company’s leading position in the Agricultural Inputs (Agri-inputs) Industry in Nigeria, its wide geographical footprints, and diversified portfolio of crop protection products (CPPs), in addition to its moderate leverage position. The rating is further supported by Saro Agrosciences’ ongoing importsubstitution initiatives through the local production of its agrochemicals. We believe this will enhance the Company’s competitive position in the Agri-inputs Industry, significantly reduce its reliance on imports, and ultimately translate to an overall improvement in earnings and cash flows over the near to medium term. However, the rating is constrained by the Company’s persistent working capital deficiency and thinning margins amid rising cost pressures, as well as its highly concentrated ownership structure.
Saro Agrosciences Limited is the leading player in the Agricultural Inputs Industry in Nigeria. The Company’s business activities involve the importation, sale, and distribution of crop protection products (CPPs), seed treatments and other agricultural inputs such as fertilizers and farming implements.
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.
