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Lahore, May 04, 2023 (PPI-OT): Salman Paper Products Private Limited (‘SPPPL’ or the ‘Company’) is involved in the business of import, sizing and trading of paper and related products from various countries. The light asset and high turnover base model of business has provided strength to the Company in establishing its brand name amongst the leading importers of paper and related products in the southern markets with an average market share of ~25% during FY22.
The CEO/owner – Mr. Aslam Jilani has an extensive knowledge of business and paper industry trends with overall 30 years of experience. While the management has a well understanding of business and operational efficiencies, the governance structure is considered weak due to the absence of a formal board structure, board committees, and independent oversight. However, the external auditor is on SBP’s panel of auditors and is QCR rated, providing comfort to the assigned ratings.
The financial risk profile of the Company is considered good, with sufficient cashflows and a well-managed working capital cycle. The Company has availed a non-funded facility from a financial institution to import key finished goods items. The leveraging of the Company lies at 65.7% as of FY22 (FY21: 45.2%). Revenue for the Company during FY22 stood at PKR 9,542mln (FY21: PKR 6,418mln) with net profit margin of 1.1% (FY21: 2.3%). The Company’s revenues are showing growth period on period with the increasing customer base. The Company structure is not complex making management of operations an easy and timely task with one head office and two production offices. Being part of group wherein tacit intergroup cooperation exists, bodes well to the rating.
The ratings are dependent on the Company’s ability to sustain its position amidst changing business environment and management’s ability to run the operations of the Company optimally. With the upcoming growth in firm’s business and volumes; prudent financial discipline and implementation of a stringent control environment shall remain imperative.
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