AsiaNet-Pakistan Premier Editorial Content and Press Release Distribution Service
Karachi, August 28, 2019 (PPI-OT): VIS Credit Rating Company Limited (VIS) has assigned initial entity ratings of ‘BBB’/A-3’ (Triple B/A-Three) to FM Express (FME), a proprietorship concern. The medium to long-term rating of ‘BBB’ denotes adequate credit quality coupled with reasonable and sufficient protection factors. Moreover, risk factors may vary with possible changes in the economy. The short-term rating of ‘A-3’ denotes timely payment of obligations coupled with satisfactory liquidity and other protection factors. Risk factors are larger and subject to more variation. Outlook on the assigned ratings is ‘Stable’.
FME is primarily engaged in the business of transportation services with a fleet of more than 350 buses/vans and 25 bus terminals in major cities of Pakistan. The firm generated revenue growth during last three years mainly through higher seat occupancy rate while profit reduced on account of higher wages, depreciation and interest expenses. With continuous replacement of old buses with new state-of-the-art buses, the firm developed its niche without facing any major threat from its competitors.
Trade receivables continue to remain modest as tickets are mostly sold mainly on cash basis. The firm utilizes long term lease financing facility and equity to purchase new vehicles while lease facility is normally repaid in three years. Liquidity indicators and coverages have remained adequate. The ratings are dependent upon maintenance of current capitalization level and leverage indicators.
For more information, contact:
Director Compliance and Rating Analytics,
VIS Credit Rating Company Limited
VIS House, 128/C, 25th Lane off Khayaban-e-Ittehad,
Phase VII, DHA, Karachi, Pakistan
Tel: +92-21-35311861-72
Fax: +92-21-35311873
Email: bilal@jcrvis.com.pk
Website: https://www.vis.com.pk/