Karachi: The Pakistan Credit Rating Agency Limited (PACRA) has upgraded the short-term entity rating of Liberty Wind Power 2 Limited, acknowledging the company's stable financial outlook and robust cash flow management under a regulated tariff structure.
According to PACRA, the upgraded rating reflects Liberty Wind Power 2 Limited's ability to generate predictable cash flows despite revenue declines due to wind variability during fiscal year 2025. The company's revenues fell to PKR 1.95 billion from the previous year's PKR 2.51 billion. Nevertheless, operating profits stood at PKR 970 million, with a net profit of PKR 260 million and an EBITDA-to-finance cost coverage of 2.1x, indicating adequate debt servicing capacity.
The company has successfully managed liquidity and working capital needs through internal cash generation, minimizing reliance on external borrowings. Available credit lines also offer additional support for future financial requirements. The reduction in borrowings to PKR 8.84 billion and an increase in equity to PKR 3.35 billion highlight a gradual improvement in its capital structure.
PACRA's assessment further notes that the company's regulated cost-plus tariff structure, which provides for indexation related to operations and maintenance, exchange rate fluctuations, and debt servicing, contributes to reducing inflationary, currency, and counterparty risks. This framework offers stability to Liberty Wind Power 2 Limited's long-term earnings and enhances visibility over approved project costs through tariff true-up determination.
The upgraded ratings are underpinned by the company's stable contracted revenues, disciplined financial management, and commitment to scheduled debt repayments. Looking forward, PACRA anticipates that the ratings will remain supported by continued operational performance and a stable regulatory environment governing tariff recovery mechanisms.
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