Press Release
VIS revises Ratings of Orient Electronics (Pvt.) Limited
Karachi, June 26, 2020: VIS Credit Rating Company Limited (VIS) has revised the entity ratings of Orient Electronics (Pvt.) Limited (OEL) from ‘A/A-2’ (Single A /A- Two) to ‘BBB+/A-2’ (Triple B Plus/A-Two). Long term entity rating of ‘BBB+’ reflects adequate credit quality; protection factors are reasonable and sufficient. Risk factors are considered variable if changes occur in the economy. The short-term rating of ‘A-2’ denotes good certainty of timely payments coupled with sound liquidity and fundamental protection factors. The previous rating action was announced on March 26, 2019.
The assigned ratings take into account extensive experience of sponsors in the home appliances industry that has helped OEL maintain long-term relations with the vendors and dealers. The ratings incorporate pre covid-19 sizeable scale of operations and strong brand recognition. The ongoing geopolitical scenario, global economic landscape and slowdown in domestic economic activity amidst the COVID-19 pandemic has posed financial risk to the company given the low volumes of consumer durables sales impacting revenues, profitability, liquidity and debt repayment capacity. The high season sales have largely been missed by the industry due to Covid-19 situation. The company’s ability to maintain scale of operations, improve profit margins and contain leverage indicators around current levels would be the key ratings sensitivities going forward.
For further information on this rating announcement, please contact Ms. Maham Qasim (042-35723411-13, Ext. 8005) and/or the undersigned at 021-35311861-66 (Ext. 306) or email at info@vis.com.pk
Faryal Ahmad Faheem
Deputy CEO
Applicable rating criterion: Corporates (May 2019)
https://www.vis.com.pk/kc-meth.aspx