, Puts It on Negative Watch Due to Liquidity Concerns
Thank you for reading this post, don't forget to subscribe!Story: LONDON, Aug 6 – Fitch Ratings has downgraded Dangote Industries Limited’s (DIL) credit rating to B+ and placed it on negative watch, citing worries over the company’s liquidity and fundraising capabilities.
Dangote Industries, which operates Africa’s largest oil refinery—a 650,000 barrel-per-day facility in Nigeria—also controls Dangote Cement. Fitch’s downgrade reflects a significant decline in the company’s liquidity, as it has underperformed operationally and financially and has been impacted by the devaluation of the naira currency.
Fitch noted that no positive rating changes are anticipated until the company’s liquidity improves substantially. The naira’s devaluation in 2023, which saw the currency hit record lows, resulted in a 2.7 trillion naira ($1.74 billion) foreign exchange loss for Dangote. The ratings agency highlighted a “mismatch” between Dangote’s dollar-denominated debt and domestic revenue in naira.
In the first half of the year, the company’s oil refinery operated at about 50% capacity, processing between 325,000 and 375,000 barrels per day. Additionally, Dangote’s fertiliser business has suffered from insufficient gas supply. Fitch expects further declines in Dangote’s cement margins this year due to limited ability to pass on higher costs to consumers amid soft demand.
Reported by Naija247news.
