VIS Reaffirms Ratings of Matco Foods Limited

Karachi: VIS Credit Rating Company Limited has reaffirmed the entity ratings of Matco Foods Limited at ‘BBB+/A2’, indicating adequate credit quality with reasonable protection factors and good certainty of timely payments. The outlook on the ratings remains ‘Stable’, continuing from the previous rating action announced in December 2023.

According to VIS Credit Rating Company Limited, Matco Foods Limited was established in 1990 as a private limited company in Karachi and went public in 2018. The company, known for processing and exporting rice and related products under the brand name “Falak,” operates multiple processing plants in Pakistan. Its product range includes basmati rice, rice glucose, rice protein, corn starch, Himalayan pink salt, and various gourmet items.

In the fiscal year 2024, Matco Foods reported a significant improvement in revenue, driven by favorable market conditions and increased sales volumes. Export sales accounted for 59% of total sales, with the rice category comprising the majority of net sales. Despite strong revenue growth, profit margins were impacted by high raw material costs and financial charges, leading to a negative bottom line. However, margins are expected to recover through interest rate cuts and product diversification.

The company’s liquidity and capitalization profile faced challenges due to elevated gearing and leverage ratios. However, with no major capital expenditures planned and anticipated improvements in margins, financial metrics are expected to enhance. The ratings will continue to rely on sustained sponsor support and financial recovery.

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