Karachi, March 28, 2019 (PPI-OT): VIS Credit Rating Company Limited (VIS) has upgraded the entity ratings of Pan Asia Food Products (Private) Limited (PFPL) from ‘BBB/A-2’ (Triple B/A-Two) to ‘BBB+/A-2’ (Triple B Plus/A-Two). Outlook on the assigned ratings is ‘Stable’. The previous rating action was announced on July 12, 2018.
The assigned ratings draw comfort from the commitment that no long term debt would be undertaken by the company and short term borrowings and trade payables in relation to net sales would be maintained at prudent levels over the rating horizon. Ratings also reflect adequate financial risk profile of the company as indicated by moderate capitalization and liquidity indicators. The ratings are, however, constrained by high business risk profile of the edible oil industry; room for improvement also exists in the product mix and governance structure of the company.
PFPL has been involved in the manufacture and sale of vegetable banaspati and cooking oil for over two decades. Ratings continue to derive strength from established track record of sponsors in the edible oil business and favourable demand prospects for edible oil in the domestic market. Going forward, ratings are dependent upon maintenance of leverage indicators and margins at current levels while improving trend in the same will be a positive rating sensitivity. Any deviation from communicated rating benchmarks would impact the ratings.
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