RAM Ratings Lanka reaffirms EB Creasy and Company A-/P2 ratings

RAM Ratings Lanka has reaffirmed EB Creasy and Company PLC's (EB Creasy or the Company) long- and short-term corporate credit ratings of A and P2.The outlook on the long-term rating is stable. The ratings are supported by its diversity in business operations, major market positions in most of its business lines, the resilient demand for agrochemicals, and above-average debt-protection metrics. However the ratings are pressured by its exposure to the volatility in the plantation segment and its vulnerability to fluctuations in raw material prices. EB Creasy and its subsidiaries are collectively referred to as the Group.

EB Creasy is a diversified company with interests in consumer products and FMCG, plantations, chemicals, hardware, leisure and agriculture.

EB Creasy's ratings largely reflect the credit profile of its subsidiary Lankem Ceylon PLC (Lankem), which contributed about 75% of Group revenues and pre-tax profits in FYE March 31, 2012 (FY Mar 2012). Lankem is also rated A-/P2 by RAM Ratings Lanka. The diversified operations enable the Group to better weather a downturn in any particular sector to a certain extent.

Meanwhile, the ratings are upheld by the Group's good market position in its key business lines. EB Creasy Group is one of the top 3 players in the agrochemicals industry.

Furthermore, EB Creasy Group is also among the top 3 players in the paint industry while controlling 60% of the thinner market owing to its exclusive dealership agreements and distribution fleet.

Elsewhere, EB Creasy Group is also a major player in the bitumen industry, aided by its established brand name and distribution network.