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Multan: The Pakistan Credit Rating Agency Limited (PACRA) has maintained the entity ratings of Ahmed Fine Textile Mills Limited (AFTML) at ‘A’ for the long term and ‘A1’ for the short term, with a stable outlook. This rating affirmation underscores AFTML’s robust operational infrastructure and strategic expansion efforts.
According to a statement by The Pakistan Credit Rating Agency Limited, AFTML’s ratings are bolstered by its affiliation with the eminent Fazal Group, a significant player in the textile industry. The company’s infrastructure spans spinning, weaving, and towel production, with an annual capacity of 40.7 million kilograms of yarn, 110.5 million yards of greige fabric, and 3.9 million kilograms of towels.
In the fiscal year 2024, AFTML invested in capital expenditures, adding 1,924 spindles and 14 terry looms to its operations. This move aims to cater to the increasing demand for coarser yarn and terry towels, a strategic diversification that complements its existing product lines.
The company’s revenue for FY24 reached PKR 46.68 billion, up from PKR 37.03 billion in FY23, with weaving being the most significant contributor. AFTML’s export market, primarily in Europe, is expanding, particularly in the terry towel segment, which is expected to reach profitability soon.
Despite challenges like high cotton prices and rising energy costs impacting margins, AFTML has taken steps to mitigate these issues. The installation of a 3.5-megawatt solar power system is complete, with an additional 7.5-megawatt system under construction, financed through long-term debt.
AFTML has also strategically reduced its short-term borrowings, improving its profitability and financial risk profile. The management remains focused on optimizing inventory and reducing lead times to enhance working capital management.
The ratings reflect the need for AFTML to strengthen its operations amid economic challenges and generate adequate cash flows to meet financial obligations. The company’s future plans include exploring laser printing on terry towels to tap into niche markets with higher margins.
The post PACRA Affirms Ahmed Fine Textile Mills’ Ratings Amid Strategic Expansion appeared first on Pakistan Business News.