Pakistan Credit Rating Agency maintains ratings of Packages Limited

Lahore, June 27, 2014 (PPI-OT): The Pakistan Credit Rating Agency (PACRA) has maintained the long-term and short-term entity ratings of Packages Limited at ‘AA’ (Double A) and ‘A1+’ (A One Plus) respectively. These ratings denote a very low expectation of credit risk emanating from a very strong capacity for timely payment of financial commitments.

The ratings reflect the sustained improvement in risk profile – both business and financial – of the company. This primarily emanates from hiving down of paper and board and corrugated operations, and partnership with an established international player in JV company – Bulleh Shah Packaging (Private) Limited (BSPL).

The benefits have started flowing in the form of turnaround in core performance. The continuing operations at Packages have experienced further improvement in profitability due to higher productivity of tissue plant and focused efficiency in packaging operations. The company is now eying a real-estate project, through a subsidiary, on which work has started.

Meanwhile, with transfer of Bulleh Shah and related liabilities to respective company and improved cash flows of remaining business, Packages’ financial risk profile has improved. At the same time, the ratings draw comfort from stable dividend stream from its sound investment portfolio.

The ratings are dependent on the company’s ability to execute its envisaged strategy of growth and expansion. Meanwhile, further strengthening and formalizing of oversight mechanism for its investee companies is important.

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

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