ICR ratifies Forus S.A.'s AA-/Stable credit rating and First Class Level 1 for its shares, mnemonic Forus, which is due to the company’s financial strength categorized by ICR at an "Exceptional" level, and to factors related to its business, such as the strength of its distributed brand, its target customer segment (which has lower revenue variability and, consequently, less variability of revenues and, consequently, of risk for Forus), the diversification of its operations in four countries, and the economies of scale of its operations that have contributed to successfully advancing its digital strategy in recent years.
In our opinion, Forus' business structure has allowed it to be a relevant player in its niche market, generating a high level of sales per square meter, despite Chile's challenging consumer scenario following the dilution of liquidity stimuli in the economy. At the same time, the multi-brand and single-brand formats, complemented by a successful digital strategy, strengthen Forus' offering, generating greater customer loyalty.
The company's financial strength is also a determining factor in the ranking, which is characterized by a conservative financial policy, a very low stock of debt, high levels of cash, and consequently, robust credit indicators. In all the evaluation periods (2017-2022) Forus presents very high liquidity ratios (4.5 times average approx.), low levels of indebtedness (less than 0.5 times) and negative Net Financial Debt/EBITDA and net indebtedness indicators as a result of liquid assets that comfortably exceed its financial debt (including leases).
Although the company made extraordinary dividend disbursements last year against its retained earnings, we did not observe any associated credit deterioration, precisely as a result of the excess liquidity that the company has accumulated over the past few years, coupled with high operating cash generation and limited usual dividend distributions.
Although the retail sector faces a complex scenario for 2023 due to the high level of inflation, a more restrictive monetary policy (with a TPM that remains at 11.25% due to the fact that inflation has not shown a solid convergence towards its 3% target) and lower liquidity in the economy, we expect the impact on Forus to be less than that of other industry players that target other socioeconomic segments. In this regard, we believe that Forus still has ample headroom to face eventual operational downturns without impacting its risk rating, which justifies the Stable trend assigned to its classification, and we expect its rating to remain unchanged over the next 12-18 months.