Caribbean Information and Credit Rating Services Limited (CariCRIS), the Caribbean regional credit rating agency, has reaffirmed the ratings of CariA+ (Foreign Currency Rating) and CariA+ (Local Currency Rating) on its Caribbean regional rating scale to the USD 10 million debt issue (notional) of TOSL Engineering Limited (TOSL). The ratings indicate that the level of creditworthiness of this obligation, adjudged in relation to other obligations in the Caribbean is good.
The ratings on TOSL continue to reflect the company’s strong market position, competing in niche markets and offering a 24/7 operation. TOSL’s strong brand equity through offering quality products and services with exclusive distributorship licence through strategic alliances also supports the ratings. These business strengths continue to be reflected in good profitability and debt protection measures which though declining somewhat from prior year, remain comfortable around 2007 levels.
The financial performance is expected to be tempered over the next year as energy companies continue to delay capital projects as a result of relatively low global demand and product prices. These strengths continue to be tempered by TOSL’s high reliance on the energy sector and high working capital requirements. Further tempering the ratings is the low operating efficiency with replication of services among the operating divisions.
This is expected to improve over the next year with the establishment of a Project Manager position to consolidate major bids across the divisions. The business continues to be heavily reliant on its Promoter and Chief Executive Officer, though efforts are being made to gradually reduce this reliance.