JCR-VIS reaffirms rating of Sukuk issue of Engro Foods Limited at A+

Karachi, December 14, 2015 (PPI-OT): JCR-VIS Credit Rating Company Limited (JCR-VIS) has reaffirmed the rating of the Sukuk issue of Rs. 950m of Engro Foods Limited (EFoods) at ‘A+’ (Single A Plus). Outlook on the assigned rating is ‘Stable.’ The previous rating action was announced on December 31, 2014.

Efoods operates in the consumer goods segment, employing innovative marketing, branding and competitive pricing to acquire a substantial market shares in domestic dairy, beverage, ice cream and frozen desserts market. More than 80% of sales revenue is generated from two flagship products. Improved demand for products and strategic marketing aided growth in sales, which grew 22.8% for 9M15 as compared to the preceding period. The company has been able to take advantage of higher domestic consumer milk prices and inventory management to achieve better margins.

Internal cash flow generation has improved during 2015, reducing the company’s need to utilize short term running finance facilities. Generation of the same will be vital as a major portion of long term financing is due during 2016 and 2017. This includes principal repayments of outstanding sukuk issue; first payment was completed in July 2015. Sustenance of the funds from operations at a healthy level would be important, going forward, to retire back loaded debt in 2016 and 2017.

For more information, contact:
Ms. Sobia Maqbool
CFA
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