Press Release
VIS Assigns Initial Ratings of Al Rahim Trading Co. (Private) Limited
Karachi, February 28, 2019: VIS Credit Rating Company Limited (VIS) has assigned initial entity ratings of ‘A-/A-2’ (Single A Minus/A-Two) to Al Rahim Trading Co. (Private) Limited (ATC). The long term rating of ‘A-’ signifies good credit quality, adequate protection factors. Risk factors may vary with possible changes in the economy. Short term rating of ‘A-2’ depicts good certainty of timely payment. Liquidity factors and company fundamentals are sound with good access to capital markets. Risk factors are small. Outlook on the assigned ratings is ‘Stable’.
ATC is a part of the Al Rahim Group (ARG) of Companies which has diversified presence in the liquid storage, trading business of chemicals, petrochemicals and petroleum products, oil marketing, printing & packaging, gas and control atmosphere storage sectors. Installed terminal storage capacity of the group stands at around 180,000 MT at Keamari Port. ATC is the flagship company of the ARG. Key operating segments of the company include liquid bulk storage facilities, and import & export trading of chemicals, petrochemicals, petroleum products, and sugar cane molasses/Ethanol. ATC is amongst the leading commercial importers of petrochemicals in the private sector. Investment in subsidiaries and associates represent around one-fifth of the total asset base. With a number of subsidiaries currently in growth phase, cash flow requirements from investments in associate/subsidiaries are expected to remain elevated and limited dividend income is projected to materialize from the same over the rating horizon.
The assigned ratings incorporate ARG’s extensive experience & strong market position in the storage terminal business and well-developed storage and pipeline infrastructure. Ratings also reflect adequate financial profile as reflected by low leverage indicators, sound cash flow coverages and conservative financial policy. Ratings are constrained by current corporate governance framework and moderate business risk profile as evident from client concentration in export business and volatility in revenues generated from import segment. Ratings remain dependent on maintaining conservative financial policy, improving governance framework and adequately managing business risk.
For further information on this rating announcement, please contact the undersigned (Ext: 201) or Mr. Talha Iqbal (Ext: 213) or at 021-35311861-71 or fax to 021-35311872-3.
Javed Callea
Advisor
Applicable Rating Criteria: Industrial Corporates (May 2016)
http://www.jcrvis.com.pk/docs/Corporate-Methodology-201605.pdf