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

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 2020 VIS Credit Rating Company Limited . All rights reserved. Contents may be used by news media with credit to VIS .