Lahore, November 11, 2019 (PPI-OT): The ratings incorporate a robust business profile of the company, represented by its leading market share of ~37% with ~59 million cellular subscribers as at End-Sep’19. This strong share has been achieved with both organic and inorganic growth. The company enjoys synergies related to operational and technical networks, reflected into better earnings for the merged entity. Optimizing on its single brand “Jazz”, the company commands solid volumes and strong margins. Additionally, in collaboration with Mobilink Microfinance Bank, an associated entity, the company is establishing a strong digital banking platform.
Overall market dimensions remain positive with respect to mobile data services, as penetration level in 3G/4G subscribers stands at ~34% as at End-Sep’19, depicting sufficient room for growth. The re-imposition of tax on mobile services (May’19 onwards) will normalize the revenue level going forward. The company’s financial risk profile exhibits a strong outlook demonstrated by prudent working capital strategies, comfortable coverages and moderate leveraging (June’19). Debt profile majorly comprises long term borrowings, including foreign currency exposure. Following 1HCY19, payments for renewal of 2G license (USD~225mln) necessitated additional external capital dependence, which has leveraged the company’s capital structure, more than the current standing.
The ratings are dependent upon the sustenance of robust revenue growth and profitability. Positive outlook captures the leading market position of the company and its strong performance indicators. As capital structure becomes leveraged, maintenance of sound financial discipline is imperative to uphold the positive outlook.
For more information, contact:
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