AsiaNet-Pakistan Premier Editorial Content and Press Release Distribution Service
Lahore, August 01, 2023 (PPI-OT): Pakistan’s technology sector contributes ~1% to the national GDP and stood at approximately PKR~647bln in FY22 (FY21: PKR~485bln), with the domestic market size for technology products and services estimated to be PKR~273bln in FY22 (FY21: PKR~218bln). Meanwhile, during FY22, exports of the total technology industry increased to PKR~374bln (FY21: PKR~267bln). In recent years, the Government has enhanced its focus on the tech industry and recognized the potential for growth and investment that exists. The Ministry of Information Technology and Telecommunication (MoITT), has taken various steps such as the establishment of IT Parks nationwide to promote the industry and provide an enabling ecosystem for businesses and start-ups.
The ratings assigned to Multinet Pakistan (Pvt.) Limited reflects a good management profile with experienced individuals who have been a part of the company for many years. The Company has one management committee in place, which includes all the departmental heads, and policies, procedures, budgets and key performance parameters are discussed in the committee meetings regularly to review activity. With an optical fiber network footprint of ~13,500 KM, the Company has experienced a rising top line over the years. Margins, and in turn profitability have remained adequate. Financial risk profile is characterized with low leveraged capital structure represented through a debt-to-capital ratio of ~25.3% as at CY22 (3MCY23: 25%).
The net profit margin has decreased to 1.4% in 1QCY23 (CY22: 6.3%). While working capital (CY22: ~52 days | 3MCY23: ~81 days) remains stretched in terms of gross working capital. In addition, 25% of cellular traffic and 50% of financial market traffic runs through Multinet Pakistan Pvt. Limited. Moreover, the company is committed to enhance the governance frameworks where the Board was enhanced to include 5 members from 2 members beforehand, including 2 Independent directors, and a formal internal control mechanism was established. The appointment of independent directors enhances the transparency of the company, contributing positively to its corporate governance practices. The company has strong financial transparency due to the appointment of EY and Baker Tilly as their internal and external auditors.
The ratings are dependent on the management’s ability to realize the projected margins, and its strong capital structure. Prudent management of working capital cycle and coverage ratios remains imperative. However, any significant delay in realizing the projected cashflows would have a negative impact on ratings.
For more information, contact:
Analyst,
The Pakistan Credit Rating Agency Limited (PACRA)
Awami Complex, FB1, Usman Block New Garden Town,
Lahore, Pakistan
Tel: +92-42-5869504-6
Fax: +92-42-5830425
Email: hammad.rashid@pacra.com
Website: www.pacra.com
The post PACRA Maintains Rating of Multinet Pakistan (Private) Limited appeared first on Pakistan Business News.