Agusto & Co. has upgraded the credit rating of Odu’a Investment Company Limited (OICL) to ‘Aa-,’ citing a significant improvement in the company’s financial performance.
Agusto, in its 2025 corporate rating report, said the assigned rating, which is stable, reflects the improvement in OIL’s operating income and cash flows, driven by higher dividend receipts from investee companies, increased investment income from non-equity assets and stronger rental earnings.
According to the agency, the rating also recognises the positive impact of the company’s ongoing strategic repositioning efforts, including divestments from non-performing assets and reinvestment into high-yielding investment portfolios managed by reputable asset managers.
The company added that the rating is upheld by OIL’s growing investable capital and pool of liquid assets, diversified earnings profile, conservative financing structure, low leverage and portfolio of subsidiaries and associates with established positions across key sectors of the Nigerian economy.
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“However, the rating is constrained by the Company’s low profitability, which reflects underperforming legacy assets and the early-stage nature of its recent investments,” the rating agency said.
“We also note that the earnings performance of portfolio entities remains vulnerable to macroeconomic pressures, including elevated inflation, high energy costs and volatile input prices, which may dampen dividend flows to OICL.
“Odu’a Investment Company Limited is the non-operating holding company of Odu’a Group.
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“OICL is owned and controlled by six states in Nigeria’s South-West region (Ekiti, Lagos, Ogun, Ondo, Osun and Oyo).
“The company has a diversified portfolio of subsidiaries and associates operating in various sectors in Nigeria, including real estate, equipment leasing, agriculture, printing and publishing, manufacturing, hospitality, healthcare, financial services and oil and gas.
“OIL’s revenue sources comprise dividends from equity investments in portfolio companies, interest income from non-equity investments and funds placed with asset managers, rental charges on investment properties, sale of securities in its trading portfolio and management fees charged for technical and administrative services rendered to group entities.
“In assigning the rating, we have assessed the financial condition of the Holding Company as a standalone entity. Agusto & Co. did not appraise the performance of Odu’a Group, which comprises Odu’a Investment Company Limited and its ten subsidiaries and associates.”
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‘ODU’A INVESTMENT COMPANY’S OPERATING INCOME INCREASED BY 81%’
In the financial year ended December 31, 2024, Agusto said OIC’s total operating income increased by 81 percent to N7.2 billion, primarily driven by higher dividend receipts from investee companies, particularly from equity investments in Aradel Holdings Plc, Lafarge Africa Plc and Wema Bank Plc.
This, the company said, is in addition to higher rental income following upward rate adjustments, and improved investment income from assets under management and non-equity investments supported by the high-yield environment.
The rating agency noted that, despite increasing cost pressures, the company’s operating profit margin rose to 45.9 percent in the 2024 financial year, up from 35.2 percent in 2023.
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