Press Release

VIS Reaffirms Entity Ratings of International Packaging Films Limited

Karachi, December 9, 2024: VIS Credit Rating Company Limited (‘VIS’) has reaffirmed the entity ratings of International Packaging Films Limited (‘IPAK’ or ‘the Company’) at ‘A/A1’ (Single A/A One). 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 'A1' suggests strong likelihood of timely repayment of short-term obligations with excellent liquidity factors. Outlook on the assigned ratings remains ‘Stable’. Previous ratings action was announced on October 05, 2023.

IPAK was incorporated as a private limited company on October 2, 2015. The Company’s status was converted to a public limited company on June 11, 2021, and subsequently listed on the Pakistan Stock Exchange on June 3, 2024. IPAK is primarily involved in the production and sale of flexible packaging materials, including BOPP (Biaxially-oriented Polypropylene) films and related products. It commenced commercial operations in September 2017. The registered office is located in Karachi, while the manufacturing plant is situated at Hattar Industrial Estate, Haripur, Khyber Pakhtunkhwa.

Assigned ratings incorporate the high to medium business risk profile of Pakistan's packaging films industry. Demand for packaging films is largely driven by the food and beverage sector, although companies face volatility due to reliance on imported raw materials, which exposes them to fluctuations in global polymer prices and exchange rates. Competitive pressures within the sector, coupled with rising input costs and regulatory requirements for environmental compliance, contribute to margin compression for industry participants.

Assigned ratings also take into account the Company’s financial risk profile. Moderate topline growth reflects increased volume sales, albeit with some margin compression due to competitive pressures in export markets. The capitalization profile remains conservative, with a slight increase in gearing and leverage ratios, driven by debt-financed investments in capacity expansion and investment in subsidiaries, partially offset by equity enhancements. Liquidity has been adequate, supported by a consistent current ratio, though coverage has faced some pressure due to higher finance costs affecting debt servicing capacity of the Company.

Going forward the company's ability to manage its debt service coverage effectively and maintain adequate liquidity ratios will be an important consideration. However, given the downward revision in interest rates in recent months, the pressure on coverage is expected to ease.

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 2024 VIS Credit Rating Company Limited . All rights reserved. Contents may be used by news media with credit to VIS .