Lahore: The Pakistan Credit Rating Agency Limited has maintained the entity ratings of Khadija Edible Oil Refinery (Pvt.) Limited, reflecting its established presence in the edible oil sector, which includes refining crude palm oil and producing various cooking oils and ghee. The company's strong brand equity and the largest production capacity in Pakistan are pivotal to its sustained market position.
Khadija Edible Oil Refinery's ability to produce over 850 million tons of vegetable ghee and edible oil daily underscores its significant market influence. The company's ratings are bolstered by the extensive experience of its sponsors across multiple industries, contributing to a performance-driven corporate culture. This strategic approach has enabled the company to effectively navigate the challenges inherent in the edible oil industry, particularly in a market reliant on imported palm oil.
The management team, noted for its experience and qualifications, strengthens operations, enabling the company to refine 500 metric tons of crude palm oil and produce 300 metric tons of banaspati and cooking oil. The company derives 80% of its revenue from vegetable oil and ghee sales, with additional income from a shortening plant and tolling services.
Recent financial performance highlights a 4.1% increase in topline revenue, reaching PKR 28,638 million, supported by higher volumetric sales and a reduction in inflation. Profit after tax increased to PKR 1,334 million, up from PKR 448 million the previous year, with profit margins improving due to timely raw material procurement.
Khadija Edible Oil Refinery maintains a robust financial profile, characterized by strong coverage ratios and a healthy working capital cycle. The company exhibits substantial financial strength with an equity base of PKR 4,140 million and stable leverage indicators.
The ratings are contingent upon the company's ability to sustain business volumes and profitability while managing working capital prudently. The company's brand reputation and customer retention play a crucial role in supporting its ratings.