Lahore, December 28, 2020 (PPI-OT): The ratings denote Airlink’s adequate operational sustainability underpinned by its solid market position and diversified earnings from its mobile distribution business. Over the last few years, the Company has improved its business profile. Topline is witnessing an ample growth on a Year-on-Year basis owing to the formidable demand of mobile handsets in the country. Global tension among Huawei and USA were expected to hamper the business volumes of the country.
However, Airlink has been successful in subduing the challenge by replacing the foregone Huawei offtake with the sales of a new brand – Tecno. Additionally, sales of new brands including Apple, Itel and Alcatel have also augmented the topline. With its legal status converted to a Public Unlisted Entity in Apr’19, several improvements in the governance structure are witnessed including induction of three independent directors.
Move is on the horizon for public listing. The company’s import driven business model is mandated to be secured against cash margin with insurance for the in-transit; short term debt book, therefore, appears ballooned on account of regulatory compliance of import contracts – effective working capital strategies are imperative. Financial risk profile is demonstrated by sanguine free cash flows from operations (FCFO) and leveraged capital structure.
The ratings are dependent on the company’s ability to sustain its relative position and positive performance indicators amidst growth. As business volumes grow, prudent financial discipline – particularly in capital structure, is essential to uphold the ratings.
For more information, contact:
Analyst
The Pakistan Credit Rating Agency Limited (PACRA)
Awami Complex, FB1, Usman Block New Garden Town,
Lahore – Pakistan
Tel: +9242 586 9504 -6
Fax: +9242 583 0425
Email: hammad.rashid@pacra.com
Web: www.pacra.com
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