PACRA – Page 15 – PPI News Agency

PACRA Maintains Entity Ratings of Pak Arab Refinery Limited

Lahore, December 11, 2020 (PPI-OT): Rating incorporates the company’s strategic importance to economy through its operations extended to, transportation of petroleum products through integrated Pipelines, Refining, and Marketing, providing efficient, low-cost, and environment-friendly energy solutions. PARCO is also contributing substantially towards socio-economic benefits and Foreign Exchange savings; its low business risk emanates from its leading market position, strong demand of its products and its advanced Refinery Complex technology.

Volatility in International Oil prices remained as one of the key challenges along with adversities of COVID-19 Pandemic. The ratings, however, recognize PARCO’s aptness and timeliness in subduing challenges on its financial risk profile. Company investments in dollar based TDR cover its financial risk profile to a maximum level and also acts as an implied hedge against exchange rate fluctuations. In 3MFY21, the Company earned a net profit of ~PKR 3.2bln supported by dividend income from subsidiaries and joint venture company. Moreover, return on investments also reflected positively on the company’s performance.

The ratings take into account PARCO’s strengthened position in midstream and downstream sector resulting through acquisitions and completion of expansion projects. The company went through a capacity enhancement phase taking the optimum capacity level from100,000 barrels per day (bpd) to 120,000 bpd, however this expansion is expected to start paying off in near future as the country wide lockdown situation has eased out. Additionally, PARCO also embarks on setting a new state-of-the-art 250,000 bpd Coastal Refinery Project which is at a preliminary stage. Strong capital structure and sizable equity has, historically, enabled the company to absorb hefty capital expenditures.

Effective management of upcoming projects, consistency in Government policies and technological improvisation will remain critical for the ratings. Meanwhile, sustained competitive positioning is also imperative.

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

The post PACRA Maintains Entity Ratings of Pak Arab Refinery Limited appeared first on Business News Pakistan.

PACRA Maintains IFS Rating of Habib Insurance Company Limited

Lahore, December 10, 2020 (PPI-OT): The rating incorporates the Company’s association with astute sponsors Habib Family. This provides a sound basis for governance while providing stability through group business. The rating acknowledges HIC’s corporate strategy to increase its position on the market by prudent underwriting practices while focusing on bottom-line growth. The company’s GPW remains steady, reflecting market penetration despite Covid-19. Product innovation and elongated market outreach, capitalizing on the Habib group, bodes well for HIC’s business profile. HIC maintains a multi-faceted investment portfolio that supports risk absorption.

Prior to COVID-19, the general insurance industry witnessed a growth of 11% YoY. The current pandemic affected the volumes, which led to a contraction in the growth. However, volumes have picked up post-June 2020 amidst increase in economic activities throughout the country. Upsurge in auto sales and health products has been pivotal. Underwriting profitability i.e. core business has been maintained through reduced management expenses while innovative products are being envisaged. Investment income is being routed through equities, amid upsurge in PSX and diminished interest rates.

The rating relies upon improving the relative position of the product on the sector. In addition, the future perspectives of the company will require further improvements in business size, underwriting profitability and investment income. As the company grows, the liquid profile must be enhanced.

The post PACRA Maintains IFS Rating of Habib Insurance Company Limited appeared first on Business News Pakistan.

PACRA Assigns Initial Ratings to K-Electric Limited | Islamic Commercial Paper-12 upto PKR 3,200mln

Lahore, December 09, 2020 (PPI-OT): The ratings reflect improved performance metrics of the company. There was significant improvement in the turnover as reflected in the published financial statements for FY19. This led to decent growth in the net profit as well though EBITDA slightly took a dip. Units generated, sent out and sold all of these indicators witnessed rise. T and D losses have also shown improvement. There was rationalization in the trade debts. A significant jump has been noted in the other receivables, primarily due to outstanding balances and tariff differential claims. Thus for additional cash and to fulfil working capital requirement company is resorting to short term debt avenues.

Till date K-Electric has issued a series of eleven Islamic Commercial Papers, among these four ICPs worth PKR 15.7bln are not yet due for redemption while the rest are redeemed timely. Furthermore, K-Electric has also issued a Sukuk bond of PKR 25bln. The company continued to add to its asset base: expansion was noted in plants, distribution and transmission. There has been increased in payable side that is mainly due to power purchase from CPPA-G/NTDC (650 MW) which as per the agreed mechanism are to be adjusted with TDC.

The performance metrics in the ongoing financial year has shown similar trends with more focus on the production and sale of power units. At the same time, upholding business and financial metrics is of utmost importance. The company has bridged its gap in regulatory timeline for the publication of financial statements. The 109th Annual General meeting of K-Electric was held through video conferencing on June 03, 2020.

The post PACRA Assigns Initial Ratings to K-Electric Limited | Islamic Commercial Paper-12 upto PKR 3,200mln appeared first on Business News Pakistan.

PACRA Upgrades Entity Ratings of Kingcrete Builders

Lahore, December 04, 2020 (PPI-OT): The ratings reflect the Kingcrete’s extensive experience in the civil construction and engineering business. The firm has exhibited renewed energy ever since the induction of the second generation. Over the years, Kingcrete has undertaken sizeable no of projects, which span a number of years. Some large size projects has been acquired and are in the process – providing projected revenues in the coming years as well. The equity base is strong and is mostly represented by a portfolio of investment property.

The upgrade reflects Kingcrete’s sustained improvement in business performance, with growth in revenue and margin. During FY20, topline witnessed growth of 38% (FY 20: 3.0bln, FY19: 2.1bln) in Kingcrete’s. There is remarkable improvement in the gross profit and net profit on the comparative scale, aided by good repute in market and extensive experience of the management. The pipeline is healthy; therein for the sake of sustainable long term growth. The customer list portrays some of the best names in the domestic market. The Company has a track record of over four decades with strong capabilities in executing turnkey projects.

As the entire income is tender-based, revenue depends on the firm’s ability to bid successfully. Therefore the working capital requirement also depend on the project in execution; wherein performance guarantees are essential. This leads to a high dependence on bank lines to fund working capital. The expansion in business is expected to reflect positively on the future risk profile of the entity. The Company is adequately leveraged and the performance of the company rests with projects in hand and timely completion.Going forward, the decrease in the finance cost, as a result in rationalized KIBOR, would provide cushion. The ratings are dependent upon the company’s ability to sustain and improve its business profile in the wake of challenges in current diluted economic scenario. Herein, effective and prudent management of financial risk indicators remain important.

The ratings are dependent on the sustainability of the business and financial structure of Kingcrete. Governance and corporate structure requires upgradation and improvement and so does the financial disipline. The management has an express mandate to corporatise its structure while improving the reporting of its financial performance on a quarterly and annual basis.

The post PACRA Upgrades Entity Ratings of Kingcrete Builders appeared first on Business News Pakistan.

PACRA Upgrades Entity Ratings of Panther Tyres Limited

Lahore, December 02, 2020 (PPI-OT): Panther Tyres Limited has built strong brand equity. In an industry, which is volume driven and price sensitive, brand name provides inherent strength. This has enabled the company to sustain its market share. Panther Tyres has strong positioning in its respective niches. The company has a formidable market share in 2 and 3 wheeler tyres, tractor tyres, and tubes segments. The company has recently expanded its product range and introduced two new types of tyres which are related to trucks and buses and earth movers (caterpillar).

The company has received favorable market response in these new segments. The distribution network designed along product lines and nature of segment plus longstanding relationships with Original Equipment Manufacturers (OEMs) are of crucial help. The sponsors have built a strong management team with a wholesome mandate: roles are clearly demarcated with high degree of delegation. The new leadership from the sponsor side is in full control.

The company has improved its overall organization structure and is inculcating financial transparency as per Code of Corporates Governance. Further, role of chairman and CEO has been segregated and four new directors including 3 independent directors have been elected on the board to strengthen the governance of the company.

All in all, the company is poised for listing. Revenue stream is segmented into OEMs and Replacement Markets (RM), wherein (RM) has a higher inclination. The company’s financial risk profile is demonstrated by stable margins, healthy coverages and adequate capital structure. Despite Covid19 outbreak with associated lockdown period the company managed to sustain its growth in revenues and margins during FY20 and 1QFY21 which show consistency in growth.

Export side of the company is gradually escalating, currently the company exports 2, 3 and 4 wheeler tyres to 12 countries in the world. The management believed that grey channels are curtailed thus demand from replacement market is expected to rise in future which will be complemented through planned capacity expansion, whereas the OEMs demand will be subject to multiple challenges.

The ratings are dependent on the management’s ability to sustain its business profile with cautious management of market risks, increase in international outreach and improvement in governance structure.

The post PACRA Upgrades Entity Ratings of Panther Tyres Limited appeared first on Business News Pakistan.

PACRA Maintains Rating of Byco Petroleum Pakistan Limited

Lahore, November 30, 2020 (PPI-OT): The rating reflects unconditional and irrevocable credit guarantee available to Sukuk holders from a multilateral guarantor – GuarantCo. Limited, rated AAA (June’19) by PACRA. The guarantee covers 100% of the issue amount (principal). The issuer maintains and efficiently manages ‘Debt Service Reserve Account’ (DSRA) under lien of the Security Trustee whereby the installments (Principal plus Profit) are being made regularly, prior to the due date. The issuer ensures (a) an amount equivalent to two upcoming Rental payments (profit only) is maintained in the DSRA at all times during the tenor of the Sukuk Issue, and (b) each Redemption amount (principal), is deposited in the DSRA 55 days prior to the relevant Redemption Date.

In case the issuer is unable to fund the installment on the funding date, a 30 day cure period will be given to the issuer. Simultaneously, the guarantor will be informed. If DSRA is not replenished in the stipulated time, the trustee will call the guarantee to settle the total outstanding principal amount. In any case, the guarantor would ensure that the requisite amount is filled in DSRA, not later than 5 business days before the due date. Meanwhile, profit would be settled through already held rental payment. During the current period, the issuer has deferred payment of principal installments for one year under SBP’s directive. Deferment of principal repayment for one year has been approved by the guarantor, GuarantCo. Limited.

For more information, contact:
Analyst,
The Pakistan Credit Rating Agency Limited (PACRA)
Awami Complex, FB1, Usman Block New Garden Town,
Lahore, Pakistan
Tel: +92-42-5869504-6
Fax: +92-42-5830425
Email: hammad.rashid@pacra.com
Website: www.pacra.com

The post PACRA Maintains Rating of Byco Petroleum Pakistan Limited appeared first on Business News Pakistan.

PACRA Maintains Entity Ratings of Sapphire Fibres Limited

Lahore, November 24, 2020 (PPI-OT): The ratings reflect Sapphire Fibres Limited’s (Sapphire Fibres) established business profile emanating from a strong presence in the broader value-chain; enabling the company to manage volatility in the textile industry. The business profile has improved on the back of the newly established denim weaving segment despite the negative impact of the COVID-19 pandemic and withdrawal of zero-rated sales tax. During FY20, Company’s gross and net margins mostly remained stagnant while net margin improved on the back of dividend from Sapphire Electric.

A sizable investment book (~PKR 10.6bln, ~67% of equity) built over the years by deploying surplus funds augments the Company’s profile. Meanwhile, recent economic conditions and volatility in the stock market diminished trading portfolio performance and ensuing income, despite investment in blue-chip stocks. However, strong core operations have led to continued improvement in profitability. Reduction in policy rates and the moratorium relief by SBP provided respite to the whole sector. The markets gradually opened in some parts of the world towards the end of 1QFY21.

Going forward, the second wave of the pandemic has begun its course and lockdowns may be a cause of concern. However, the business community is expecting to continue operations under strict SOPs, both; locally and in most of the export destinations of the Company. The Company took the SBP facility of deferment of the principal amount of the long-term loan. The financial risk of the company is stretched; as the debt coverage remained stretched, however, Company bounced back in 1QFY21 and the coverages improved due to a reduction in finance cost.

Free cashflows have shown significant improvement due to better performance in core operations, reflected in improved coverages in 1QFY21 after being stagnant in FY20. The expected continuity of the dividend stream from Sapphire Electric will further supplement the bottom-line and coverages. Ratings incorporate association of the company with well-established Sapphire Group.

The ratings are dependent on sustaining the business profile of the Company by maintaining profitability and margins achieved from core textile operations. At the same time, the sustainability of non-core income and prudent management of the surplus funds are important. Sustainability of coverages would remain critical to avoid any drag on financial profile due to a prolonged downturn in capital markets.

The post PACRA Maintains Entity Ratings of Sapphire Fibres Limited appeared first on Business News Pakistan.

M	T	W	T	F	S	S
		1	2	3	4	5
6	7	8	9	10	11	12
13	14	15	16	17	18	19
20	21	22	23	24	25	26
27	28	29	30	31