AsiaNet-Pakistan Premier Editorial Content and Press Release Distribution Service
Lahore: The Pakistan Credit Rating Agency (PACRA) has assigned a long term entity rating of “A-” (Single A minus) and short term rating of “A2” (A Two) to Hussain Mills Limited (HML). These ratings denote a low expectation of credit risk. The capacity for timely payment of financial commitments is considered strong.
The ratings reflect strength in the business model of the company, which aims at quality and diversity of product basket, sustainable customer relationships, and efficient production process. This has helped company in achieving relatively better and stable core margins. The organizational structure is designed to segregate key roles in order to ensure due focus and responsibility.
HML has an advanced technology infrastructure, though manufacturing module is yet to come and some key MIS is not system generated. The company is primarily driven by the key sponsors – Chairman and family.
Although this is a feature of most family owned enterprises, upholding of good governance standards remain critical. The financial risk profile of the company, considering director’s interest free loan as quasi equity, is expected to remain manageable.
The ratings are dependent on the continued competitiveness of the company in its key markets, which may be subject to volatility due to ongoing economic crisis in Europe, a key market for HML. Meanwhile, any material deterioration in the company’s margins or adverse drop in operational cash flows, emanating from business risk, would have negative implication for the ratings.
For more information, contact:
Hammad Rashid
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