TRIS Rating Co., Ltd. has assigned the company rating of Asian Seafoods Coldstorage PLC (Asian) and the rating of its Bt300 million senior debentures at "BBB+" with "stable" rating outlook. The ratings reflect the company's experienced management team, diverse products and markets and conservative financial policy. However, these strengths are partially offset by the competitive and volatile nature of the seafood industry, a lack of vertical integration and the trade barriers that have been implemented by major importing countries in the past recent years.
The "stable" outlook reflects the expectation that Asian will sustain its steady margins in the medium term. The US anti-dumping case has been resolved with the imposition of a 5.95% duty, while the status of reduced tariffs for Thai products under the EU's Generalized System of Preferences (GSP) is still uncertain.
TRIS Rating reported that Asian is a medium-sized seafood producer in Thailand with sales of Bt4,800 million in 2004. Most members of its management team have long experience in the seafood business and have worked for Asian for more than ten years. Its skilled workforce has worked with the company for an average of seven years. Asian offers a variety of products ranging from basic products like raw shrimp to more value added products, such as breaded shrimp and sashimi, which require higher-skilled workers. A broad product line and long-term relationships with clients in various countries give Asian operating flexibility. The company has managed its debt and capital expenditures carefully, as part of a conservative financial policy. Major shareholders have a strong intention to maintain the target debt to equity ratio at less than 1:1. The company's debt to capitalization moved in the range of 37%-42% during the last four years.
TRIS Rating said that operators in the seafood business, like other agribusiness players, face fluctuations in raw materials and product prices. Profit and cash flow are somewhat seasonable and volatile. Although Asian is a medium-sized Thai seafood exporter, its scale is considered small, relative to many large global players. Asian has its own niche market on sillago fish products. However, the company is at a disadvantage compared with large players in terms of fully vertical and horizontal integration. Trade barriers, such as anti-dumping duties imposed by importing countries, cause difficulties for most seafood exporters. On the other hand, the regulations could benefit larger companies, including Asian, as many small seafood exporters may not be able to cope with the stricter rules and may be shut out of such markets in the future.
On 28 July 2005, a fire event at Asian Seafoods Coldstorage (Suratthani) Co., Ltd. caused approximately Bt135 million of damage. Repairs are underway and are expected to be completed by mid September 2005. The major part of the production line remains in operation. The areas affected by the fire are insured and the company expects the claim will be paid in full by its carrier, New Hampshire Insurance Company, TRIS Rating said. -- End
Asian Seafoods Coldstorage PLC (Asian) Company Rating: BBB+ Issue Rating: Bt300 million senior debentures due 2009 BBB+ Rating Outlook: Stable
The "stable" outlook reflects the expectation that Asian will sustain its steady margins in the medium term. The US anti-dumping case has been resolved with the imposition of a 5.95% duty, while the status of reduced tariffs for Thai products under the EU's Generalized System of Preferences (GSP) is still uncertain.
TRIS Rating reported that Asian is a medium-sized seafood producer in Thailand with sales of Bt4,800 million in 2004. Most members of its management team have long experience in the seafood business and have worked for Asian for more than ten years. Its skilled workforce has worked with the company for an average of seven years. Asian offers a variety of products ranging from basic products like raw shrimp to more value added products, such as breaded shrimp and sashimi, which require higher-skilled workers. A broad product line and long-term relationships with clients in various countries give Asian operating flexibility. The company has managed its debt and capital expenditures carefully, as part of a conservative financial policy. Major shareholders have a strong intention to maintain the target debt to equity ratio at less than 1:1. The company's debt to capitalization moved in the range of 37%-42% during the last four years.
TRIS Rating said that operators in the seafood business, like other agribusiness players, face fluctuations in raw materials and product prices. Profit and cash flow are somewhat seasonable and volatile. Although Asian is a medium-sized Thai seafood exporter, its scale is considered small, relative to many large global players. Asian has its own niche market on sillago fish products. However, the company is at a disadvantage compared with large players in terms of fully vertical and horizontal integration. Trade barriers, such as anti-dumping duties imposed by importing countries, cause difficulties for most seafood exporters. On the other hand, the regulations could benefit larger companies, including Asian, as many small seafood exporters may not be able to cope with the stricter rules and may be shut out of such markets in the future.
On 28 July 2005, a fire event at Asian Seafoods Coldstorage (Suratthani) Co., Ltd. caused approximately Bt135 million of damage. Repairs are underway and are expected to be completed by mid September 2005. The major part of the production line remains in operation. The areas affected by the fire are insured and the company expects the claim will be paid in full by its carrier, New Hampshire Insurance Company, TRIS Rating said. -- End
Asian Seafoods Coldstorage PLC (Asian) Company Rating: BBB+ Issue Rating: Bt300 million senior debentures due 2009 BBB+ Rating Outlook: Stable