BBF debuts in Fitch Ratings' analysis and achieves BBB- rating with positive outlook
Brasil BioFuels (BBF), a Brazilian company that operates in agribusiness from palm cultivation to trading, biofuel production and renewable energy generation, has achieved a BBB- rating in an analysis by Fitch Ratings, one of the world's largest credit rating agencies. The rating configures the company as a good investment opportunity with low speculative risk and good payment capacity.
In its report to the market, Fitch states that "the rating reinforces the positive outlook for BBF's business and highlights the company's long-term strategies," which have increasingly invested in the diversification of biofuels. The agency also explains that the BBB- level also reflects "the expectation of a better business profile and greater predictability of operational cash generation after the start-up of its thermoelectric plants under construction, expected to be concluded in 2022 and 2023. Also according to Fitch, the company presents "limited exposure to demand risk on the sale of palm oil (CPO), as a result of signed sales contracts and the potential use in its generators.
BBF manufactures biodiesel and will produce biomass from palm oil from its own plantation. The company has a biodiesel production plant in Rondônia and in 2025 it will open a biorefinery in the Manaus Free Trade Zone that will produce two new biofuels for the Brazilian market: sustainable aviation fuel (SAF) and green diesel (HVO). The Biorefinery will receive an investment of R$2.2 billion and will produce 250 million liters of HVO and 280 million liters of SAF annually.
The company has 24 thermoelectric plants in operation in the North region and another 14 in the implementation phase, which currently serve 110 thousand northern clients, providing the removal of more than 60 million liters of fossil diesel per year from the Amazon atmosphere. The projects in the pipeline were fundamental to achieve the rating, according to Fitch: "the company's growth plan foresees greater verticalization of its business, with reduced exposure to palm oil volatility (CPO). The use of palm oil for domestic consumption in biodiesel production and electricity generation is currently immaterial and the completion of the thermoelectric plants, with energy sold through long-term power purchase agreements (PPAs), will increase cash flow stability." BBF contributes directly to decarbonization and the improvement of the quality of life in the North region, generating jobs, socioeconomic development, and producing sustainable fuel. Its expertise will enable sustainable solutions also for investors and private companies in the future.
For more information go to: https://www.fitchratings.com/research/pt/corporate-finance/fitch-publishes-bbfs-rating-bbb-bra-outlook-positive-20-06-2022
About BBF
Brasil BioFuels (BBF) is the largest oil palm producer in Latin America, with a cultivated area of over 68,000 hectares and production of around 200,000 tons/year of oil, and one of the pioneers in creating sustainable solutions for generating energy in isolated systems: plants powered by biodiesel produced in the region. Its agricultural activity recovers areas that were degraded until 2007 in the Amazon, following the Agroecological Zoning of Oil Palm Culture (ZAE), approved by Decree 7.172, of May 7, 2010.
BBF has created an integrated business model in which it operates from the beginning to the end of the value chain - from palm planting, crude oil extraction and biofuel production to energy generation - with assets totaling around R$1.5 billion and activities generating more than 6,000 jobs in the northern region of Brazil. BBF's operations are located in the states of Acre, Amazonas, Rondônia, Roraima and Pará, comprising 38 thermoelectric plants (24 in operation and 14 under implementation), 3 oil palm crushing units, 1 soybean crushing unit and 1 biodiesel industry.
The company is expanding its supply of biofuels and has signed partnerships for the production of Sustainable Aviation Fuel (SAF) and Hydrotreated Vegetable Oil (HVO), also called green diesel. The new sustainable fuels will be produced in the first Biorefinery of this type in the country, currently under construction in the Manaus Free Trade Zone, scheduled to start operating in 2025.
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