Press Release

JCR-VIS Assigns Positive Outlook to Allied Rental Modaraba

Karachi, July 4, 2012: JCR-VIS Credit Rating Company Limited has maintained the entity ratings of Allied Rental Modaraba (ARM) at ‘A/A-2’ (Single A/A-Two). Outlook on the ratings has been revised from ‘Stable’ to ‘Positive’.

Managed by Allied Engineering Management Company (Private) Limited, a wholly owned subsidiary of Allied Engineering Services Limited (AESL), ARM is the market leader in generator rental business. Support from AESL, the sole dealer of Caterpillar (CAT) products in Pakistan, remains a key rating factor.

The ratings take into account growth in revenues and profitability on the back of increase in operating assets. Concentration in revenues is high and the management plans to diversify revenue streams by enhanced focus on the logistics business, where a number of top-tier clients have been added recently. Moreover focus on earth moving equipment for construction and infrastructure related projects will also increase once the operating environment becomes enabling.

Liquidity profile is considered strong in view of the sustained cash flow from operations. With stable internal capital generation since inception, capitalization levels have strengthened over the years resulting in low leverage. Going forward, rapid expansion in operating assets is planned which is projected to be funded through a mix of debt and internal cash flows. Ability to maintain leverage at moderate levels while pursuing growth related objectives will remain important. The governance framework can be further strengthened by enhancing the level of independence on the board and formally documenting checks and controls in the client selection process.

For further information on this rating announcement, please contact Ms. Sobia Maqbool, CFA (Ext: 506) or Mr. Javed Callea (Ext: 501) at 35311861-70 (10 lines) or fax to 35311873.

Jamal Abbas Zaidi
Deputy CEO

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 2012 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