Following the revaluation of PALMCI’s ratings, the Bloomfield Investment Corporation Rating Committee decided to maintain the A rating (investment rating) for the long term, with a stable outlook and to maintain in the short term , the A1 rating (investment rating), with a stable outlook.
The Rating Committee notes that the global production of palm bunches increased by 18% in 2019 (1,365,104 tonnes compared to 1,152,239 tonnes in 2018) due not only to the end of the vegetative rest phenomenon, but also to actions carried out in favor of improving the yield of plantations (village and industrial). This increase in the production of palm bunches contributed to that of palm oil production (+ 17%), then to the 4% increase in turnover to 104,588 million CFA francs (although the AIPH’s average selling price of crude palm oil continued to decline in 2019).
The Committee notes that commercial performance and control of operating expenses had a positive impact on the company’s results, which have improved (commercial margin: + 14% added value: + 24%; EBITDA: + 203%; Net income: + 56%). The Committee notes, however, that PALMCI’s long-term financial structure remains unbalanced, due to the net losses recorded over the last two (2) years (2018: – 12,613 million CFA francs; 2019: – 5,562 million francs CFA). This financial imbalance negatively affects the financing profile of the company’s activities (greater use of short-term bank indebtedness), with operating cash flow tested by investment needs (mainly intended to maintain the productivity of plantations and to strengthen the management / production capacities of factories) in a context of a general drop in the selling price of palm oil (linked to changes in the world price of palm oil) and strong competition.
The Committee nevertheless notes that PALMCI has good financial flexibility with banking partners, which is supported by the strong position of its main shareholder (the SIFCA group) in the agro-industrial fabric and the country’s economy. The Committee notes that PALMCI’s activities appear not to have been significantly impacted by the health crisis, in view of the upward trend in the selling price of palm oil during the first seven (7) months of year (year-on-year), which contributed to an increase in turnover (83,265 million CFA francs against 75,574 million CFA francs in July 2019) of net profit (9,333 million CFA francs against 8 455 million CFA francs in July 2019). …