JCR-VIS Assigns Initial Ratings to Pakistan Cables Limited

Karachi, September 04, 2018 (PPI-OT): JCR-VIS Credit Rating Company Limited (JCR-VIS) has assigned initial entity ratings of ‘A/A-1’ (Single A /A-One) to Pakistan Cables Limited (PCL). Outlook on the assigned ratings is ‘Stable’. The assigned ratings incorporate PCL’s position as the leading wire and cable manufacturer in the country and strong brand strength and reputation as a provider of quality cables. Business risk profile is underpinned by growing demand for wires and cables and extensive experience and track record of the management team.

Overall corporate governance framework is supported by sound board oversight, stable and professional management team and focus on transparency and disclosures. Going forward, ratings are dependent on timely completion of proposed expansion while maintaining financial indicators within benchmarks for the assigned ratings.

The wiring and cable industry is characterized by significant competition with existence of several large players and numerous small unorganized firms. Business risk profile is supported by stable and growing demand for wires and cables in the country from housing, energy, automotive, construction and other segments. However, business to business segment is exposed to competition from Chinese imports while retail sales face competition from informal manufacturers operating domestically.

PCL posted improvement in profitability during FY17 on account of growth in sales, lower effective tax rate and one-time reversals. Liquidity profile draws support from adequate cash flows in relation to outstanding obligations. Debt profile of PCL is largely short-term in nature while leverage indicators have remained within manageable limits. The Company is in the process of expansion of manufacturing facilities which will enhance production capacity and further augment cash flows. Right shares for planned expansion were announced with proceeds realized in July’2018.

For more information, contact:
JCR-VIS Credit Rating Company Limited
VIS House, 128/C,
25th Lane off Khayaban-e-Ittehad,
Phase VII, DHA, Karachi
Tel: +92-21-35311861-72
Fax: +92-21-35311873
Email: sobia@jcrvis.com.pk