Agusto & Co. hereby assigns a “Bbb-“ rating to Lionseal Industries Limited
The rating expires on 30 June 2023.
Agusto & Co. hereby assigns a “Bbb-“ rating to Lionseal Industries Limited (“Lionseal Industries”, “Lionseal” or “the Company”). The rating reflects our opinion on the Company’s financial condition, characterised by good cash flow position, satisfactory profitability, moderate leverage and good liquidity profile. The rating is supported by the Company’s diversified portfolio of crop protection products and its ability to pass on some cost increases to consumers, although this is typically dependent on seasonality (planting and harvesting) and demand. The rating is also supported by the ongoing expansion and diversification initiatives which are expected to boost Lionseal’s earnings and moderate FX risk exposures over the near to medium term. However, the assigned rating is constrained by the Company’s inadequate working capital and exposure to foreign exchange risks on agrochemical imports as well as the FX-induced losses on borrowings (with most of the Company’s debts denominated in United States dollars). This is in addition to the susceptibility of Lionseal’s businesses to global supply chain disruptions, given that the Company’s products are largely imported and its corporate governance structure that requires strengthening.
Lionseal Industries Limited is one of the leading players in the Agricultural Inputs Industry in Nigeria. The Company was incorporated on 4 September 2007 as a private limited company. Lionseal’s principal business activities involve the importation, sale and distribution of herbicides, pesticides, insecticides, fumigants and sprayers. The Company is directly and indirectly owned and managed by the Rajashekar Hande family.
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.