United Nigeria Construction Corporation

CFBANQUE Investment confirms the BB rating assigned to United Nigeria Construction Corporation (DIG0941.LG), an operator in the Construction & Cement sector based in Nigeria. This credit opinion reflects a speculative profile with heightened sensitivity to the economic cycle, refinancing conditions and input price volatility.

From a fundamental standpoint, the issuer posts an EBITDA margin of 52.9% which sits at the upper end of the sector range and evidences robust pricing power and exhibits a net leverage of 1.76x EBITDA, deemed consistent with the issuer's recurring cash flow generation. With revenues of $8.59B and a market capitalisation of $6.57B, United Nigeria Construction Corporation commands a significant economic footprint within its domestic market.

Our proprietary models assign a Debt Capacity score of 641/1000, an Investment score of 433/1000 and an ESG & Governance score of 360/1000, reflecting an acceptable debt coverage, a limited investment potential at this stage and governance workstreams that need to be deepened.

The Stable outlook indicates that our committee does not anticipate, in its central scenario, a revision of the rating over a 12 to 18 month horizon. This analysis stems from the combined review of our quantitative models and the qualitative judgement of the CFBANQUE Investment rating committee, and may be updated in line with the evolution of fundamentals or the regional macroeconomic environment.