Graanul - comment

Graanul released a decent trading statement for FY24 but the focus will remain on its ability to refinance its 2026 bond maturities. Leverage remains at c 5.4x, versus 4.6x at the time of the refinancing, with interest coverage struggling to reach 2.0x on a likely 8-10% refinancing rate. Bonds have recovered a few points but remain down over the last month.  

The trading statement includes confirmation production volumes were lower than sales, helping its inventory position. The improved liquidity of€185m (€65m cash, €100m RCF and €20m supplier financing) is from a sale and leaseback on a vessel of €25m. Graanul has placed a minimum of 75% of its 2.8mt production capacity for FY25 following recent multi-year contracts secured in Q3 and Q4.