Rating Release
Agusto & Co. hereby assigns an “A+” rating to Dangote Sugar Refinery PLC
The rating expires on 30 June 2024.
Agusto & Co. hereby assigns an “A+” rating to Dangote Sugar Refinery PLC (“Dangote Sugar”, “DSR” or “the Company”). The assigned rating reflects the Company’s strong ability to meet maturing obligations buttressed by its robust earnings capacity despite the prevailing macroeconomic headwinds, its very good cash flow and liquidity positions underpinned by its favourable trade terms with customers and suppliers, its adequate working capital and low leverage metrics.
The rating also considers DSR’s dominant position in the Nigerian Sugar Industry supported by the strong brand awareness for its products, its ongoing backward integration programme into sugarcane production to reduce reliance on raw sugar imports and its stable, qualified and experienced management team. However, the rating is constrained by DSR’s exposure to foreign exchange risks, which we expect to weigh on profitability in the near term, the increasingly difficult operating environment in the country as well as the volatilities in global sugar prices and the attendant impact on profit margins.
