EM CEEMEA CREDIT: OCPMR: FY results, supportive read
OCP (OCPMR; Baa3/BB+pos/BB+)
FY24 results, supportive read
- Morocco’s fertiliser producer OCP posted strong FY24 results today showing strong growth in sales across geographies.
- FY 24 rev’s were up 8% YoY showing sequential quarterly growth to USD9.75bn equivalent (69% fertilizers). EBITDA up 35% YoY at USD3.9bn equivalent, EBITDA margin increased to 40%. Leverage was at 2.48x (vs 2.38x in FY23). Capex was higher vs previous year at USD4.38bn equivalent.
- For reference, our feeds show OCPMR 6.75 May34 charting at z+243bp, marginally wider YTD (see chart below).
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OPTIONS: Expiries for Feb19 NY cut 1000ET (Source DTCC)
- EUR/USD: $1.0500(E1.6bln)
- USD/JPY: Y152.00($1.3bln), Y152.50($649mln), Y155.00-20($1.7bln)
- AUD/USD: $0.6325(A$558mln), $0.6520(A$880mln)
- NZD/USD: $0.5450(N$1.7bln), $0.5800(N$865mln)
- USD/CNY: Cny7.1800($600mln), Cny7.3400($1.2bln)
GILT AUCTION PREVIEW: On offer next week
The DMO has announced it will be looking to sell GBP1.6bln of the 1.125% Sep-35 linker (ISIN: GB00BT7HZZ68) at its auction next Tuesday, February 25.
US DATA: Tariff Threats Curb Homebuilder Enthusiasm
The National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI) fell more than expected in February's survey, to 42 (46 expected, 47 prior), a 5-month low. And future sales expectations (6-months ahead) dropped 13 points to 46, to a 14-month low, after having surged post-election to a 32-month high 66 in December. Present sales pulled back to 46 from January's 9-month high 50, with prospective buyer traffic likewise dropping to 29 from 32 prior, both marking 5-month lows.
- Just as the promise of "pro-development policies, particularly for regulatory reform" (per NAHB) boosted confidence in late 2024, "policy uncertainty and cost factors created a reset for 2025 expectations in the most recent HMI". Namely: tariffs.
- The NAHB notes that "builder responses collected prior to a pause for the proposed tariffs on goods from Canada and Mexico yielded a lower HMI reading of 38, while those collected after the announced one-month pause produced a score of 44", with softwood lumber and applicances named specifically.
- The report also cited "elevated mortgage rates" and "high housing costs" as factors.
- Though not singled out by the NAHB as a factor, the West of the country which includes fire-stricken California saw a 7 point drop to a 14-month low (35), though all regions saw lower readings, with the pullback in the Northeast (17 points to 48, a 6-month low) marking the biggest monthly drop since February 2021.
- The NAHB's index tends to be a good leading indicator of building permits and thus residential investment, which is seen contributing to overall GDP growth in Q1 albeit much less than in Q4 2024.
- As such, the "soft" data so far is pointing to policy uncertainty potentially dampening activity in residential construction, though ultimately the "hard" results will be impacted by the policies that are implemented.
