Los Grobo in the Media

November 01, 2019
Los Grobo reduced its debt and achieved Fix rating improvement
Months ago, he made a capital injection of US $ 100 million and obtained a loan of US $ 44 million. And he went from a Negative perspective to Stable.

In March of last year, the rating agency Fix had lowered the note to the agricultural company Los Grobo after accumulating two years with losses and showing a bulky financial debt due in the short term; Now the situation changed substantially for the firm commanded by Gustavo Grobocopatel because the rating agency not only raised its perspective from "Negative" to "Stable" but also increased its rating from BBB to BBB +.

The reason for this increase is very concrete: an improvement in its capital structure after the decrease and restructuring of the financial debt through the obtaining of a syndicated loan for US $ 44 million and the capital recomposition for the injection of capital from US $ 100 million (US $ 70 million were allocated to Agrofina -firma of the group dedicated to the sale of inputs for agriculture- US $ 30 million to Los Grobo agricultural-dedicated to primary production-) which resulted in a fall in your debt levels,

At the same time, the latest report prepared by Fix highlights: “The Stable Outlook is due to the fact that the agribusiness sector is currently the only sector that is boosting the level of general activity with a weight of 10% in the GDP of the first quarter of 2019. Fix expects a better 2019/20 campaign in terms of yields and area harvested with a competitive real exchange rate that could together generate a higher level of profitability. ”

In this way, the risk rating agency estimates that the company managed to reduce its indebtedness and improve its debt profile, which will imply a lower interest burden for the coming years.

The truth is that recently the agricultural firm presented the results of its annual balance in which it reported that its total income amounted to just over $ 17,400 million and had to face losses of $ 1,692 million. A year earlier, with revenues of $ 15,864 million, he had lost $ 2,051 million.

Despite this scenario, Fix estimates that the outlook for the short and medium term is optimistic and thus details it: “The strategic and operational plan of the controlling group will be reflected in an improvement in EBITDA (Benefits before interest, taxes, depreciation and amortization) by 2020, estimated at US $ 59 million vs. US $ 44 million on average during the 2014-2018 period. Fix understands that EBITDA growth is mainly explained by higher volumes sold by Agrofina, in line with the market, better margins in the current and expected mix of products and the execution of the cost savings plan currently carried out by the company . This will be reflected in positive net results expected from 2020 that will have a positive impact on equity”.

Automatic translation from spanish.

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