RATING ACTION:
On March 12, 2024, CariCRIS reaffirmed the issuer/corporate credit ratings assigned to Guyana Shore Base Incorporated (GYSBI or the Company) at CariAA- (Foreign and Local Currency Ratings) on its regional rating scale and gyAAA (Foreign and Local Currency Ratings) on its Guyana national scale. A stable outlook was maintained.
RATING SENSITIVITY FACTORS:
Factors that could, individually or collectively, lead to an improvement in the ratings and/or outlook include:
• Successful operations of GYSBI over the next 2 years, leading to Profit After Tax (PAT) improving by 15% or more annually
• A reduction in client concentration risk where a single client will not account for more than 50% of the Company’s revenue, sustained for 2 financial years
Factors that could, individually or collectively, lead to a lowering of the ratings and/or outlook include:
• Failure to satisfy any of the performance requirements of the contractual agreement with Esso Exploration and Production Guyana Limited (EEPGL)
• A material reduction in GYSBI’s labour and plant efficiency metrics, which would lead to an increase in GYSBI’s operating expenses
• Failure of GYSBI to meet EEPGL’s key performance indicators (KPIs) stipulated in the 11-year contract
• A reduction in services provided to EEPGL leading to revenue declines of more than 15% for 2 consecutive years
• An increase in debt leading to increased leverage of above 3.5 times sustained for 2 financial periods
• An increase in det servicing requirements, leading to a decrease in effective debt service coverage ratio (DSCR) to below 1.25 times sustained for 2 financial years
Analysts’ Contact Info:
Keith Hamlet
Mobile: 1-868-487-8356
[email protected]
Megan Dass
Mobile: 1-868-713-6863
[email protected]
www.caricris.com
[email protected]
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