Lahore, August 09, 2019 (PPI-OT): The ratings reflect Interwood’s strong brand name and established presence in the furniture industry of Pakistan. Over the years, the Company has mitigated risks associated with contractual jobs by focusing on the retail market. It has been successful in evolving its business portfolio and enjoys a healthy mix between retail and corporate sales. The ratings take into account the Company’s automated production process, national footprint and professional management team.
Recent devaluation of Pakistani Rupee will increase cost of production as a major portion of raw materials are imported. However, the Company has passed some of this cost to consumers as the product becomes more competitive against imported furniture. The ratings are restricted by the Company’s stretched financial profile, characterized by weak coverages, significant leveraging and adequate working capital management. Additionally, governance framework requires strengthening.
The ratings are dependent on the Company’s ability to maintain its leading position in the industry while sustaining margins. Meanwhile, improved financial profile through better coverages, effective working capital management and maintaining sufficient cushion to borrow, to avoid any mismatch in debt profile, will be critical for rating.
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
Category: General Business News