AsiaNet-Pakistan Premier Editorial Content and Press Release Distribution Service
Karachi, December 05, 2019 (PPI-OT): VIS Credit Rating Company Limited (VIS) has reaffirmed entity ratings assigned to Bunny’s Limited (BL) at ‘A-/A-2’ (Single A Minus/A-Two). The medium to long-term rating of ‘A-’ denotes good credit quality with adequate protection factors. Moreover, the risk factors may vary with possible changes in economy. The short-term rating of ‘A-2’ denotes good certainty of timely payment coupled with sound company fundamental and liquidity factors. Outlook on the assigned rating is ‘Stable’. The previous rating action was announced on September 11, 2018.
The ratings assigned to BL take into account the company’s moderate business risk profile owing to its presence in fast moving consumer goods market and largely established brand name. The ratings also derive strength from adequate cash flows in relation to outstanding debt and sound debt service coverage. However, the ratings remained constrained on account of market based limitations including range bound growth in revenues, decline in margins and minimal initiatives of the company towards new market development due to production capacity constraints.
The gross margins declined during the outgoing year owing to inability of the company to timely pass the incremental raw material cost into final retail prices owing to market sentiments. The decline mainly attributed to increased utility charges, petrol and lubricant cost and packing material cost that out casted better capacity utilization. Further, currently liquidity profile derives strength from adequate cash flows in relation to outstanding obligations. Going forward, the ratings will remain dependent on maintenance of liquidity indicators and cash coverages above the benchmark level.
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/