Karachi, February 27, 2019 (PPI-OT): VIS Credit Rating Company Limited (VIS) has upgraded short-term entity rating of Associated Technologies (Pvt.) Limited from ‘A-2’ (A-Two) to ‘A-1’ (A-One) while maintaining the medium to long-term rating at ‘A-’ (A Minus). The medium to long-term rating of ‘A-’ denotes good credit quality, with adequate protection factors. Moreover, risk factors may vary with possible changes in the economy. The short-term rating of ‘A-1’ denotes high certainty of timely payment, liquidity factors are excellent and supported by good fundamental protection factors. Outlook on the assigned ratings is ‘Stable’. The previous rating action was announced on February 14, 2018.
The ratings assigned to ATL take into account its low leveraged capital structure, sound liquidity position and strong coverages. The ratings are constrained by relatively higher risk inherent in competitive bidding contracts business. While considerable proportion of assets are tied-up in investment property, volatility in Real Estate may impact profitability and equity of the company.
During FY18, the company recorded decline in revenue on account of lower sales related to civil contracts. While the gross and operating margins have remained sound, the same have declined in FY18 due to increase in sales of lower margin supply of goods along with decrease in revenues generated from higher margin civil contracts. Given contracts in hand, the company is projecting higher revenue for FY19. The ratings are dependent on growth in revenue stream and maintenance of low leveraged capital structure.
For more information, contact:
Director Compliance and Rating Analytics,
VIS Credit Rating Company Limited
VIS House, 128/C, 25th Lane off Khayaban-e-Ittehad,
Phase VII, DHA, Karachi, Pakistan
Tel: +92-21-35311861-72
Fax: +92-21-35311873
Email: bilal@jcrvis.com.pk
Website: http://jcrvis.com.pk/