Press Release

VIS Reaffirms Entity Ratings of Associated Technologies (Pvt.) Limited

Karachi, January 17, 2025: VIS Credit Rating Company Limited (VIS) has reaffirmed the entity ratings of Associated Technologies (Pvt) Limited (ATL) at A-/A2 (Single A-minus/A Two) with ‘Stable’ outlook. The medium to long term rating of 'A-' indicates good credit quality, Protection factors are adequate. Risk factors may vary with possible changes in the economy. Short term rating of 'A2' signifies good likelihood of timely repayment of short-term obligations with sound short-term liquidity factors. Previous rating action was announced on September 25, 2023.

ATL is now exclusively engaged in the fabrication and erection of steel towers after the transfer of its site services segment to its wholly-owned subsidiary namely, Tower Power (Pvt.) Limited in October 2022.

The Company’s business risk profile improved during the rating review period post relaxation on import restrictions, policy rate cuts and some stability in economic conditions. Moreover, the TowerCo industry, which primarily addresses the infrastructure needs of telecom and power sectors, is poised for significant growth driven by increasing demand from expansion of 4G networks and the broader adoption of broadband. Additionally, higher demand in the power sector is likely to derive from potential privatization of Distribution Companies (DISCOs) and increasing population growth.

Moreover, the ratings reflect Company’s financial risk profile characterized by continued growth trajectory in topline primarily due to construction of new towers for its subsidiary, TPL, DISCOs and NTDC projects, while gross margins decreased slightly due to increasing cost of raw material. Liquidity indicators, in terms of working capital cycle, remained favorable. Debt service coverages remained under pressure due to low FFO, albeit taking comfort from Company’s ample cash to meet financial obligations. Meanwhile, capitalization profile remained healthy primarily due to lower net debt and higher equity base. The ratings will remain sensitive to increasing sales, stable margins, and low gearing while improving coverages.

For further information on this ratings announcement, please contact on 021-35311861-64 or email at info@vis.com.pk

Applicable Rating Criteria:

Industrial Corporates
https://docs.vis.com.pk/docs/CorporateMethodology.pdf

VIS Issue/Issuer Rating Scale
https://docs.vis.com.pk/docs/VISRatingScales.pdf

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 January 17, 2025 VIS Credit Rating Company Limited. All rights reserved. Contents may be used by news media with credit to VIS.