EthiFinance Ratings reaffirms LT corporate, NEU MTN ratings for Sofiproteol SA at A-, short-term rating on the NEU CP instrument at SR1
Lyon, June 28, 2022 – Credit rating agency EthiFinance Ratings (formerly Qivalio) has reaffirmed its long-term corporate rating for Sofiproteol SA and its NEU MTN program for up to €75m, at A-. Meanwhile, EthiFinance Ratings has also reaffirmed its SR1 short-term rating on the €300m NEU CP program of the company.
EthiFinance Ratings has analysed the credit profile of Sofiproteol SA in order to review its long and short-term ratings. The outcome is an A- long-term corporate rating, an A- NEU MTN instrument rating, and an SR1 short-term rating, unchanged from last year.
Sofiproteol’s credit profile is underpinned by good credit metrics, notably the adjusted loan-to-value ratio, which was negative at end-2021 and is expected to remain stable over the 2022-2023 period. The interest coverage ratio (FFO/ (interest + mandatory dividend to be paid)) has improved, fostered by some significant gains made over recent years.
The company operates two businesses, each accounting for roughly 50% of total adjusted assets: minority equity investments (using Sofiproteol’s equity), and cash management (using some leverage effect). The latter contains investment grade bonds in its portfolio and a high amount of French DATs (dépôts à terme, equivalent to certificates of deposits). As the diversification and liquidity of these assets is considered to be good, there is a positive impact on our ratings.
Sofiproteol’s ratings are, however, constrained by the below-investment grade credit quality on average of equity investments, the France-focused investment strategy, as well as limited diversification since equity investments are entirely oriented towards agribusinesses. It is also limited by the liquidity of these investments, which is lower than for the bonds and DATs.
Sofiproteol’s liquidity profile is still good thanks to a solid cash position as at end-2021. Based on our methodology and our projections, some significant investments in the next three years and almost neutral funds from operations will probably reduce liquidity by 2024, but the level would remain good nonetheless, helped by share capital increases planned for 2022, 2023 and 2024. Depending on liquidity needs, Sofiproteol, which has a prudent financial policy, may also adapt its investment strategy, which reinforces the good liquidity profile.
Credit metrics expected evolution (CMEE)
Our Stable CMEE reflects our view that despite significant investments expected in the forthcoming year, combined with a slight increase in financial debt, credit metrics will remain broadly unchanged.
Our methodology for short-term ratings is available at
Sofiproteol SA is a French investment company, a subsidiary of the French group, Avril, which is specialised in the oils and protein sectors. Avril SCA, the ultimate holding company of Avril, owns 70.6% of the company, the rest being owned by financial institutions and companies from the agricultural world. Sofiproteol is regulated by the Autorité de Contrôle Prudentiel et de Résolution (ACPR), the authority in charge of monitoring banking and insurance activities in France. Sofiproteol was created in 1983, originally as an investment vehicle granting term loans and taking minority stakes in companies in the oils and protein sectors in France, before it became an industrial group itself, known as Avril. In 2014 Sofiproteol became an independent investment company within the Avril group and has two separate businesses: minority equity investments and cash management. Sofiproteol’s investment strategy aims at fostering the development of the agricultural world, notably the oils and protein sectors.
EthiFinance is an innovative European rating, research and advisory group serving sustainable finance and sustainable development. It provides investors, companies and organizations with solutions to the challenges of financing as well as environmental and societal transformation. Created in 2017, EthiFinance is the result of the merger between Spread Research and EthiFinance, French financial and extra-financial rating agencies both founded in 2004. EthiFinance provides its services to a wide range of leading international clients under the brands Spread Research (independent credit research), EthiFinance Ratings (credit rating agency), EthiFinance Analytics (Risk Modelling), and EthiFinance (extra-financial rating and advisory agency).
EthiFinance (formerly Qivalio) operates as a credit rating agency registered with and regulated by the European Securities and Markets Authority (ESMA) since July 2013, and as an External Credit Assessment Institution (ECAI). Our ratings are recognized by the European Banking Authority (EBA) and the European Insurance and Occupational Pensions Authority (EIOPA), and can be used for the internal calculation and models of banks and insurance companies. Under the EthiFinance Ratings brand, EthiFinance provides financial analysis, assigns credit ratings for issuers, and provides credit opinions for financial operations (particularly for private debt funding operations or for the purpose of accounting/tax documentation). EthiFinance is one of the rating agencies authorized by the Banque de France to rate NEU CP and NEU MTN programs.