Press Release

VIS Maintains Ratings of Haleeb Foods Limited

Karachi, September 23, 2022: VIS Credit Rating Company Limited (VIS) has maintained the entity ratings of Haleeb Foods Limited (HFL) at ‘A-/A-2’ (Single A-Minus/A-Two). The medium to long-term rating of ‘A-’ signifies good credit quality with strong protection factors. Moreover, risk factors may vary with possible changes in economy. The short-term rating of ‘A-2’ denotes good certainty of timely payments coupled with sound liquidity and company fundamentals. Outlook on the assigned ratings is revised from ‘Negative’ to ‘Stable’. The previous rating action was announced on July 29, 2021.
The ratings assigned to HFL take into account moderate business risk environment underpinned by presence of the company in fast moving consumer goods (FMCG) segment coupled with positive demand prospects of dairy products in line with population growth & higher per capita consumption. However, competitive pressure in the industry remains high with two strong players accounting for 90% of the market share, leaving little room for price maneuvering in a challenging operating environment. Revision in rating outlook takes into account improvement in operating profitability profile contributed through strategic shift in product mix and reliance on in-house produced milk powder. Previously, the Company was importing powder milk, which is now being met in house, thereby reducing foreign currency exposure of the Company. Ratings remain underpinned on acheivement of higher margins as per the projected plans of the Company. Given, revenue generation in FMCG sector is highly correlated with spending on promotions and marketing, maintenance of projected margins remain a key rating driver.

Ratings incorporate management initiatives towards revenue mix and revenue diversification that has reflected positively on the operational performance of the Company with improved generation of Funds from Operations (FFO). FFO coverages including debt service coverage depicts improvement. Equity base has been sustained in FY22 with no erosion projected during the rating horizon. Gearing and leverage indicators remain still comfortably within the benchmark criteria for the assigned rating on account of minimal reliance on long-term debt. VIS will continue to monitor results of management’s initiatives to completely turnaround the Company. Ratings remain sensitive to achievement of projected plans including market penetration leading to revenue growth, improvement in margins and operational efficiency and maintenance of capitalization indicators at current level.

For further information on this rating announcement, please contact Ms. Syeda Batool Zehra Zaidi (Ext. 210) at 021-35311861-66 or the undersigned (Ext: 306) email at

Faryal Ahmad Faheem
Deputy CEO

Applicable rating criterion: Corporates (August 2021)

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