Press Release

VIS Reaffirms Ratings of Bunny’s Limited

Karachi, December 5, 2019: VIS Credit Rating Company Limited (VIS) has reaffirmed entity ratings assigned to Bunny’s Limited (BL) at ‘A-/A-2’ (Single A Minus/A-Two). The medium to long-term rating of ‘A-’ denotes good credit quality with adequate protection factors. Moreover, the risk factors may vary with possible changes in economy. The short-term rating of ‘A-2’ denotes good certainty of timely payment coupled with sound company fundamental and liquidity factors. Outlook on the assigned rating is ‘Stable’. The previous rating action was announced on September 11, 2018.

The ratings assigned to BL take into account the company’s moderate business risk profile owing to its presence in fast moving consumer goods market and largely established brand name. The ratings also derive strength from adequate cash flows in relation to outstanding debt and sound debt service coverage. However, the ratings remained constrained on account of market based limitations including range bound growth in revenues, decline in margins and minimal initiatives of the company towards new market development due to production capacity constraints. The gross margins declined during the outgoing year owing to inability of the company to timely pass the incremental raw material cost into final retail prices owing to market sentiments. The decline mainly attributed to increased utility charges, petrol and lubricant cost and packing material cost that out casted better capacity utilization. Further, currently liquidity profile derives strength from adequate cash flows in relation to outstanding obligations. Going forward, the ratings will remain dependent on maintenance of liquidity indicators and cash coverages above the benchmark level.

For further information on this rating announcement, please contact Ms. Maham Qasim at 042-35723411-13 (Ext: 8005) or the undersigned at 021-35311861-66 (Ext: 201) or email at info@vis.com.pk


Javed Callea
Advisor

Applicable rating criterion: Corporates (May, 2019)
https://www.vis.com.pk/kc-meth.aspx

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 2019 VIS Credit Rating Company Limited . All rights reserved. Contents may be used by news media with credit to VIS .