Dufil Prima Foods Plc.

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Dufil Prima Foods Plc (2021-11)
  • Dufil Prima Foods Plc.
  • Year : Nov 2021
3 Tokens
USD 300.00

Earnings are a ratings strength. Dufil has reported strong revenue progression over the years, with 8% growth in earnings in FY20 despite COVID 19 pandemic crisis and other related issues. Growth was underpinned by slight increase in price and higher traded volume, reflecting the non-discretionary nature of its products. Impacted by persistent rise in international price of inputs (mainly wheat) and the adverse impact of Naira devaluation, the EBITDA margin has generally decreased through the cycle, trending at around 12% in FY18-20, compared to the high of 20% reported in FY17. GCR expects the margin to remain in this range over the rating outlook as economic uncertainties persist.

Additional Information

The Stable Outlook reflects GCR’s view that Dufil leading position within the noodles market and completed capacity expansion will support strong earnings growth over the medium term, and therefore support improvement in gearing and liquidity metrics. Liquidity shortfall is supported by the strong access diverse funding sources. Positive rating action could emanate from successful completion of ongoing projects which translates into substantial earnings growth and sustainable higher cash flows.

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