THE Global Credit Rating Company (GCR) upgraded Trustco’s national long- and short term credit ratings and improved its outlook from evolving in December 2018 to positive.
Trustco’s ratings upgraded
The upgrade coincides with Trustco becoming the first Namibian company to list on the OTCQX in the United States allowing Trustco shares to be accesses by US investors in US dollars.
Trustco burst onto the international scene through its OTCQX-listing where the flagship post-Independence Namibian conglomerate is joining international corporates like Lufthansa, Nike, Anglo American and the Zurich International Group.
Trustco is amongst the few 456 international companies from 27 countries in the world sharing the same international financial stage.
Dr van Rooyen who personally spear heading the listing from New York – accompanied by the Financial Director, Mr Floors Abrahams, said that the iconic financial centre treated Namibia kindly with the Trustco brand breaking through with its OTCQX-listing and a 27-year old dream of his that came true.
“I must thank a dedicated Board, staff and Namibians who steadfastly stood shoulder to shoulder with Trustco over many years. It is a great achievement for Trustco as a Namibian company, but it should serve as a reminder that the nation and other corporates should step up to the plate to sustainably develop and invest in Namibia in the national interest.” Dr Van Rooyen said.
Dr Van Rooyen also welcomed the upgrading of Trustco’s long term rating to B+ and its short term rating to B with a positive outlook follows with an expected improvement in Trustco’s financial performance.
According to the GCR rating, the rationale for the upgrading of the Namibian national scale ratings on Trustco are supported by its relatively strong corporate profile in Namibia, the entity’s sectoral diversification and burgeoning international exposure, as well as GCR’s expectations that cash flow & earnings will improve materially over the next two years.
GCR are however confident that given the anticipated superior growth of the resources division, the revenue split will change in favour of the Trustco resources division (up to 50% of revenues) going forward.
Over the next two years, GCR is anticipating a strong earnings profile of the group, with EBITDA margins of over 50%.
The outlook is positive, balancing expectations of improving cash flow and earnings with the tight liquidity due to the short weighted average maturity of the funding profile. GCR also expects Trustco to timeously refinance debt maturities, raise more equity, and improve earnings and cash flow over the next two years.
A further national scale ratings improvement could arise from improved cash flow, presumably from the diamond mine and a material lengthening of the debt profile, both of which would bring about improvements in the liquidity of Trustco.