Press Release

JCR-VIS Reaffirms Ratings of Allied Rental Modaraba

Karachi, October 2, 2017: JCR-VIS Credit Rating Company Limited has reaffirmed the entity ratings of Allied Rental Modaraba (ARM) at ‘A+/A-1’ (Single A Plus/A-One). Outlook on the assigned ratings is ‘Stable’. The previous rating action was announced on December 28, 2015.

Allied Rental Modaraba (ARM) is managed by Allied Engineering Management Company (Private) Limited, a wholly owned subsidiary of Allied Engineering & Services (Private) Limited (AESL). Ratings continue to derive strength from the prominent position ARM enjoys in the equipment rental market, sound management and financial profile. It also has a service and maintenance arrangement with AESL, which is the authorized dealer for Caterpillar products in Pakistan.

Current ratings take into account growth in revenues and profitability on the back of increase in operating assets. Given that concentration in revenues is high, management made efforts in diversifying its revenue streams. In line with its diversification strategy, the company enhanced focus on the logistics and construction business; management foresees demand for construction machineries increase in the coming years. Deployment level of rental fleet and revenues from logistics and construction projects will remain key drivers for future profitability.

Liquidity profile is considered strong in view of the healthy cash flow from operations. With stable internal capital generation, capitalization levels have strengthened over the years resulting in low leverage. Going forward, further expansion in operating assets is planned; management believes that a significant amount of additional debt will not be required given that liquidity will be generated from settling of its outstanding receivables and through issue of right shares. Keeping in view robust cash flows of ARM, ability to maintain leverage at moderate levels while pursuing growth related objectives will remain important.

For further information on this rating announcement, please contact the undersigned (Ext: 201) at 35311861-70 (10 lines) or fax to 35311873.

Javed Callea

Applicable Rating Criteria: Modaraba Rating Scale October 2002

Information herein was obtained from sources believed to be accurate and reliable; however, VIS Credit Rating Company Limited VIS does not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information.VIS, the analysts involved in the rating process and members of its rating committee do not have any conflict of interest relating to the rating(s)/ranking(s) mentioned in this report.VIS is paid a fee for most rating assignments. This rating/ranking is an opinion and is not a recommendation to buy or sell any securities. Copyright 2017 VIS Credit Rating Company Limited. All rights reserved. Contents may be used by news media with credit to VIS.

JCR-VIS Credit Rating Company Limited