Lahore, July 19, 2018 (PPI-OT): The ratings reflect Nimir Resins Limited’s (“the company”) revived position and ensuing profitability subsequent to its takeover by Nimir Group. Established as a listed entity, a well-devised governance framework is in place in compliance with corporate governance requirements for listed companies. Shareholding pattern, however, displays a composite outlook. Experienced management team alongside effective production facilities transpire into operational efficiencies enabling the company to turn around its operations and now focus towards growth. The company operates in a competitive segment reflected by its relatively narrow margins and thin profitability.
The management intends to diversify product line to serve other sectors including paint, textile and paper, which bodes well for the business prospects of the company . Acquired by Nimir Group in Jan-2016, the management’s primary focus was pivoted towards consolidating the company’s deteriorated position; considerable achievement has been attained in this regard. The company is now keen on increasing its business volume and margins. The financial profile of the company is characterized by strong coverages and adequate leveraging. External funding majorly constitutes short term loans. Going forward, growth in business would necessitate prudent management of margins, debt mix and sufficient internal capital formation.
The ratings are dependent upon sustenance of profits and improving margins while establishing strong foothold in the related segments. Rational management of liquidity profile to maintain strong coverages is important for the ratings. Deterioration in margins, leading to erosion of profitability, and/or coverages will have negative impact on the ratings.
For more information, contact:
Analyst
The Pakistan Credit Rating Agency Limited (PACRA)
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Lahore – Pakistan
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Email: hammad.rashid@pacra.com
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