GCR Ratings has upgraded Axxela Limited’s national scale long-term issuer rating to ANG from A+ with a stable outlook. The upgrade reflects the company’s improved credit profile, strong operational performance, and robust financial position.
Rating Upgrade Details
The rating upgrade to ANG places Axxela among the highest-rated entities on GCR’s national scale. The stable outlook indicates that the rating is unlikely to change in the near term. GCR cited Axxela’s consistent revenue growth, efficient cost management, and strong cash flow generation as key drivers of the upgrade.
Company Performance and Financial Strength
Axxela, a leading energy and infrastructure company in Nigeria, has demonstrated resilience in its operations. The company’s revenue grew by 15% year-on-year to NGN 45 billion in the last fiscal year, supported by increased demand for its gas and power solutions. Its EBITDA margin improved to 32%, while net debt-to-EBITDA ratio declined to 1.5x, indicating lower leverage. According to GCR, “Axxela’s strong market position and diversified customer base underpin its ability to generate stable cash flows.”
Outlook and Future Prospects
The stable outlook reflects GCR’s expectation that Axxela will maintain its credit metrics and operational efficiency over the next 12 to 18 months. The company’s strategic investments in infrastructure and expansion into new markets are expected to support continued growth. However, risks remain from regulatory changes and macroeconomic volatility. GCR noted that any significant deterioration in the operating environment could pressure the rating.
Industry Context
The upgrade comes amid a challenging economic environment in Nigeria, with high inflation and currency volatility affecting many businesses. Axxela’s ability to secure the upgrade underscores its strong fundamentals and prudent management. The company’s focus on natural gas distribution and power generation aligns with Nigeria’s energy transition goals.
