AsiaNet-Pakistan Premier Editorial Content and Press Release Distribution Service
Lahore, August 22, 2019 (PPI-OT): The ratings reflect adequate profile of Awan Trading Company characterized by stable market share in imported coal, especially retail market. Over the last few years, the company has improved its business and financial profile. The Company imports majority of its raw material, where currency fluctuations and pricing risk effect margins. The management intends to pass on the impact onto customers, though demand sensitivity is a consideration.
The company has arrangements regarding supply of coal with various suppliers globally. Awan Trading Company follows strategy of keeping some inventory in stock which is stored in rented/custom bonded warehouses. The business profile is facing a challenge in terms of topline and profits. In this respect, the recent favourable decision about the taxation regime should support the company in coming days. The Awan Group caters to the coal demand of the corporates through another entity as well as having profitable operations. The financial risk profile is adequate. The company has sizable lines (funded and un-funded) available from different banks to cater to supplier demand though utilization level is still high compared to turnover.
Going forward, management’s attention on sustainable customer base is imperative. The ratings are dependent on the company’s ability to maintain its market position. Proactive management of business affairs, thus sustaining margins and coverages is important. Meanwhile, strengthening in governance structure is needed to improve financial transparency and oversight.
For more information, contact:
Analyst
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
Email: hammad.rashid@pacra.com
Web: www.pacra.com