Durrant Pate/Contributor

CariCRIS has given the Jamaican conglomerate, GraceKennedy Group, another positive credit rating in its latest assessment.

In this latest assessment, the regional credit ratings agency has reaffirmed GraceKennedy’s CariA regional and jmAA national ratings (Local and Foreign Currency). The company has also been accorded with a stable outlook, reflecting the strength of the business, resilience, and confidence in its continued growth.

CariCRIS also reaffirmed the assigned issue ratings of the Group’s bond issue of up to J$3 billion ratings at CariA (Local Currency Rating) on the regional rating scale and jmAA (Local Currency Rating) on the Jamaica national scale. 

Rate sensitivity factors:

Factors that could, individually or collectively, lead to an improvement in the ratings and/or outlook include:

• An improvement in the creditworthiness of the Government of Jamaica
• Growth in Revenue by at least 9.0%, leading to an improvement in PAT margin to 5.0% and over sustained for 2 consecutive years
• An increase in profitability resulting in return on assets (ROA) > 4% for 2 consecutive years

Factors that could, individually or collectively, lead to a lowering of the ratings and/or outlook include:

• A decline in operating profit margin to 4% or below for 2 consecutive years.
• Impending trade tensions and/or a material increase in tariffs that can adversely impact supply chain and inventory costs, resulting in the GP margin falling to below 45%, thus significantly reducing PAT, sustained for 2 consecutive years.
• Decline in the parent company’s DSCR ratio to 1.33 times or a fall in effective DSCR to below 1.5x
• Increase in Debt to EBITDA ratio to 4.0 times
• A lowering of the creditworthiness of the Government of Jamaica