Agusto & Co. upgrades the rating assigned to Flour Mills of Nigeria Plc to an “A-” with a stable outlook.
This rating expires 30 September 2021.
The rating upgrade is on account of the significant improvement in leverage metrics, good cash flow, satisfactory working capital, good profitability compared to industry average and qualified and experienced management team. The assigned rating also takes into consideration FMN’s market leadership in the flour milling industry, wide and diversified product portfolio, extensive distribution channels, and strong brands in the Nigerian fast-moving consumer goods (FMCG) sector as well as significant investment in backward integration programmes. Nonetheless, the rating is tempered by its long-term funding mismatch, which is being addressed, negative macroeconomic headwinds, shrinking consumer wallets, worsened by the adverse impact of the coronavirus pandemic (Covid-19) on businesses and households.
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.