CariCRIS Reaffirms Seprod's Ratings, Upgrades Outlook to Stable on Stronger Finances

• Caribbean Information and Credit Rating Services Limited (CariCRIS) has reaffirmed Seprod Limited's (SEP’s) corporate credit ratings. Seprod holds a CariA rating on the regional scale, meaning its creditworthiness is strong compared with other Caribbean borrowers. On the Jamaica national scale, it maintained its jmAA- rating for local currency, meaning high creditworthiness compared with other Jamaican borrowers, and jmA+ for foreign currency, meaning good creditworthiness.
• CariCRIS also moved the outlook on these ratings from negative to stable. It implies there is a high chance that Seprod's financial flexibility will keep improving over the next 12 to 15 months. This rests on Seprod replacing short-term debt with a longer-term bond, holding more cash, building a stronger capital base and focusing on debt reduction. With these changes, Seprod's debt service coverage ratio (DSCR) is expected to stay above 1.00x, allowing it to keep generating enough cash to cover its debt payments. This resolves a key concern raised in the previous review. The company is also expected to remain profitable, meet its loan conditions, and pay its debts on time over the same period.
• Seprod's strong market position, built on a varied range of products and wide distribution across the Caribbean, supports the rating. The company performed well financially in 2025, staying profitable and improving its debt metrics. Its integrated business model, good management practices, strong corporate governance and capable leadership team also support the ratings.
• The rating or outlook could improve if the Government of Jamaica's credit rating is upgraded, if Seprod's net profit (PAT) margin rises above 5% for two years, or if its DSCR stays at 1 time or above for two years.
• However, the rating or outlook could be lowered if the Government of Jamaica's credit rating is downgraded within the next 12 to 15 months. Trade tensions or higher tariffs that raise supply and inventory costs enough to push the gross profit margin below 25% could also lead to a downgrade. If PAT margin stays below 3% for two years, or a DSCR below 1.00x for two years, this could also trigger a rating downgrade.
• Seprod's recent growth has been largely inorganic and debt-financed, notably through the acquisitions of A.S. Bryden and CPJ. That strategy has broadened the Group's regional footprint and product portfolio, but it has also put material pressure on its leverage profile and solvency metrics. Realising projected operational efficiencies and synergies from these acquisitions will be critical to supporting profitability and cash generation. Furthermore, its proposed additional public offer (APO), if approved by shareholders, would be a meaningful step toward rebalancing the capital structure. Fresh equity would strengthen the capital base, compress gearing and improve solvency ratios. It would also reinforce the deleveraging trajectory and improved financial flexibility that underpin CariCRIS's revision of the outlook to stable.
• On the equities front, SEP’s stock price has decreased by 6.3% since the start of the year to close at $78.64 on October 5, 2026. At this price, the stock is trading at a price-to-earnings (P/E) ratio of 13.1x, which is below the Main Market Manufacturing Sector’s average of 13.4x

(Source: CariCris & NCBCM Research)