Press Release
VIS Upgrades Entity Ratings of Haleeb Foods Limited
Karachi, April 17, 2025: VIS Credit Rating Company Limited (VIS) has upgraded the entity ratings of Haleeb Foods Limited (‘HFL’ or ‘the Company’) from ‘A-/A1’ (Single A Minus/A One) to ‘A/A1’ (Single A/ A One). Medium to long-term rating of ‘A’ reflects good credit quality; Protection factors are adequate. Risk factors may vary with possible changes in the economy. Short-term rating of ‘A1’ signifies strong likelihood of timely repayment of short-term obligations with excellent liquidity factors. Outlook on the assigned rating is ‘Stable’. Previous rating action was announced on January 23, 2024.
Established in 1984, HFL is a public limited company engaged in the dairy sector. The Company operates as a subsidiary of Mega Foods (Pvt.) Limited. Sound profile of the parent company provide comfort to the assigned ratings. HFL offers a diverse product portfolio, including packaged milk, tea whitener, fruit juices, a variety of fat-based products, and other related dairy items.
Registered office of the Company is located in Lahore while production facilities are situated at Bhai Peru and Rahim Yar Khan.
The packaged milk industry in Pakistan faces fierce competition despite capturing only around 10% of the total milk market. This limited penetration stems from consumer preference for traditional loose milk, regulatory slackness and the sector's limited expansion over time. Though the untapped loose milk market represents significant growth opportunity for the packaged milk industry players, however, industry risk is rising amid imposition of discriminatory taxes and exacerbating inflationary pressure negatively impacting demand.
Despite a notable contraction in volumes, HFL achieved modest sales growth in FY24 through price adjustments and cost optimization. However, profitability declined slightly due to compressed gross margin. Debt servicing profile witnessed improvement amid absence of long-term debt while current ratio also improved. Moreover, the Company is maintaining and improving an investment portfolio in mutual funds, partially mitigating liquidity risk.
Ratings upgrade reflect the Company sustaining debt-free balance sheet, sustaining substantial revenue recovery achieved in the previous year combined with overall improvement in financial risk profile. Recovery in volumes, improvement in profit margins, and keeping conservative leverage profile will be important for the ratings, moving forward.
For further information on this ratings announcement, please contact at 021-35311861-64 or email at info@vis.com.pk
Applicable Rating Criteria: Corporates:
https://docs.vis.com.pk/docs/CorporateMethodology.pdf
VIS Issue/Issuer Rating Scale
https://docs.vis.com.pk/docs/VISRatingScales.pdf