Press Release
VIS Assigns Initial Ratings of AA/A-1 to International Complex Projects Limited
Karachi, March 13, 2020: VIS Credit Rating Company Limited has assigned initial entity ratings of ‘AA/A-1’ (Double A /A-One) to International Complex Projects Limited (ICPL). The medium to long-term rating of ‘AA’ signifies high credit quality; Protection factors are strong. The short-term rating of ‘A-1’ signifies high certainty of timely payments. Liquidity factors are excellent and supported by good fundamental protection factors. Risk factors are minor. Outlook on the assigned rating is ‘Stable’.
Assigned ratings take into account sponsor strength of ICPL and market position in the real estate sector; the Dolmen Group has developed & managed renowned residential, commercial and retail projects. The group has completed several projects including Dolmen Mall Clifton, Harbour Front and Executive Tower; two more towers are substantially completed and partially operational. Both Dolmen Mall and Harbour Front have an occupancy level of more than 95%. Ratings also reflect strong financial profile, low leverage indicators and healthy & growing dividend income from Dolmen City REIT (DCR). During 2019, management has concerted efforts towards strengthening its internal controls by outsourcing its internal audit function and implementing a fully integrated ERP system.
During 2019, ICPL (on behalf of the Dolmen Group) entered into an agreement with DHA Lahore to construct a commercial complex / mall in Lahore. This project will exist under a new subsidiary, DHA Dolmen Lahore (Private) Limited (DDL). As per agreement, Dolmen Group will hold 74% of investment in DDL while DHA Lahore will maintain a shareholding of 26%; profit sharing will be based on the same proportion. Total construction cost of the property is expected to be Rs. 27b.
Financial profile of ICPL draws support from the company’s strong balance sheet as evident sizeable equity base while profitability and cash flow profile of the company draws support from recurring and growing dividend income from DCR. Moreover, low leverage indicators and healthy internal capital generation depicts sound capitalization profile. Ratings remain dependent on maintenance of a healthy financial profile along with leverage indicators and materialization of its upcoming projects.
For further information on this rating announcement, please contact the undersigned (Ext. 207) or Ms. Muniba Abdullah, CFA (Ext: 215) or at 021-35311861-70 or email at info@vis.com.pk.
Jamal Abbas Zaidi
Advisor
Applicable Rating Criteria: Corporates (May 2019)
http://vis.com.pk/kc-meth.aspx