Press Release

VIS Assigns Initial Entity Ratings to Agility Logistics (Pvt.) Limited (ALPL)

Karachi, December 31, 2019: VIS Credit Rating Company Limited (VIS) has assigned initial entity ratings of ‘A/A-2’ (Single A/A-Two) to Agility Logistics (Pvt.) Limited (ALPL).Outlook on the assigned ratings is ‘Stable’. The long term rating of ‘A’ signifies good credit quality; protection factors are adequate. Risk factors may vary with possible changes in the economy. The short term rating of ‘A-2’ signifies good certainty of timely payment. Liquidity factors and company fundamentals are sound. Access to capital markets is good. Risk factors are small.

Agility Logistics (Pvt.) Limited (ALPL) is a wholly-owned subsidiary of Agility (Asia/Pacific), British Virgin Islands. The ultimate parent company of ALPL is Agility Public Warehousing Company K.S.C (APWC). As at end-Dec’2018, APWC reported total assets and net equity of KD. 1.84b and KD. 1b, respectively while net profit for 2018 amounted to KD. 99.8m. Agility group has presence across 4 continents in over 100 plus countries. ALPL provided end-to-end supply chain and logistics solution (One window solution) for its clients. ALPL provides freight forwarding & handling, customs clearance, fleet management, warehousing and distribution services to its clients. The coverage of these services expands to diversified range of clients such as multi-national corporations (MNCs) and large local corporates. Presence across a diverse array of segments allows the Company to cross sell services to clients which has contributed to increasing revenues over the years.

Assigned ratings to ALPL incorporate strong sponsor profile and demonstrated track record of support of Agility Group who have a global presence and are amongst the leading logistics & supply chain players in the Middle East. Ratings also reflect the Company’s position as an end to end logistics and supply chain service providers in the country. Business risk profile draws support form diversified nature of operations and revenue stream and strong client base primarily comprising of MNCs (including sticky global relationships) and large local corporates. However, revenues remain exposed to macroeconomic volatility while overall customer concentration is on the higher side. Comfort is drawn from high customer retention, lengthy association with most clients and continuous addition of new clients. Assessment of financial risk profile incorporates strong historical and projected growth in revenues which along with cost rationalization initiatives are expected to result in improvement in profitability which currently remains modest due to thin margins and high effective tax rate. Ratings are constrained by low quantum of cash generated from operations and free cash flows. Overall corporate governance infrastructure is considered sound and is supported by a well-designed organizational structure & clear reporting lines, solid IT platform and documented policy & procedural framework. Assigned ratings incorporate projected improvement in cash flow profile and conversion of long-term intercompany loan to equity over the rating horizon.

For further information on this rating announcement, please contact the undersigned (Ext: 201) at 021-35311861-71 or fax to 021-35311872-3.

Javed Callea
Applicable Rating Criteria: Industrial Corporates (May 2019)

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 .