Feller Rate:
Solvency: A-
Trend: Stable
Report Date: July 2019
Feller Rate maintained the A- risk rating with stable outlook assigned to the solvency and bond line of Blumar S.A., which reflects a “satisfactory” business profile and an “intermediate” financial position of the company that operates in the aquaculture and fishing segments.
The risk rating agency highlights that Blumar’s results reflect its exposure to the prices of its main products and inputs and to the phytosanitary conditions that determine the level of production, to which are added the availability of marine resources, “highlighting the support provided by extractive fishing and the greater stability that the salmon farming industry has shown in recent years”.
Regarding stable prospects, Feller Rate indicates that these consider “the realization and profitability of the current investment plan, plus a scenario of relatively stable prices for its main products, associated with the regulatory framework and the consolidation of the salmon farming industry”. Likewise, it expects the company to maintain “satisfactory liquidity”.
According to Feller Rate, the “satisfactory” business profile is based on:
- Strong market position in the fishing segment
- Good diversification of products and markets
- Vertical integration in the production process and synergies between segments
- Exposure to climate, health and regulatory risks
- Competitive advantages of the Chilean salmon industry
- Industry with high barriers to entry
In turn, the “intermediate” financial position is based on:
- Greater relative stability in the extractive fishing segment
- Revenue and margins exposed to international price fluctuations
- Conservative debt policy
- Satisfactory liquidity position
- High working capital requirements due to extensive aquaculture cycle
The report notes that in the last period there has been a significant increase in the company’s debt level, which is explained by the purchase of Salmones Ice-Val, investments in seawater and resources allocated to the salmon processing plant in the Magallanes Region. However, “Feller Rate believes that the greater transitory pressures will be mitigated, in the short and medium term, by the greater projected Ebitda generation, together with the plan to reduce the level of debt, which will allow the entity to return to credit indicators in line with the current risk rating”.
About the company
Blumar S.A. is a Chilean capital company with more than 60 years of experience in the fishing industry and more than a decade in salmon farming, with presence in regions III, VIII, X, XI, XII and XIV. It operates simultaneously in the aquaculture and fishing segments, which allows it to have a more stable income base.
For more information, review the full report athttps://www.feller-rate.com/corporativo
Analysts:
Feller Rate Risk Rating Agency
Esteban Sánchez C.
esteban.sanchez@feller-rate.cl
(562) 2757−0482
Claudio Salin G.
claudio.salin@feller-rate.cl
(562) 2757−0463
Blumar Contact:
Investor Relations Blumar S.A.
Valentina Eltit Cullacciati
Av. Colón 2400, Talcahuano, Chile
(56)-41-2269404
valentina.eltit@blumar.com
www.blumar.com
