PACRA maintains PABC's long term rating at AA-

June 30, 2026 (MLN): PACRA has maintained the entity ratings of Pakistan Aluminium Beverage Cans Limited (PSX:PABC) at AA- for the long term and A1 for the short term, with a stable outlook, citing the company's entrenched position as the country's sole domestic manufacturer and exporter of aluminium beverage cans, its strong equity base and prudent financial management.

The agency noted that despite material headwinds during CY25, particularly the closure of the Afghan border in October 2025 and elevated raw material costs, the company demonstrated operational resilience, posting net sales of Rs23.99 billion and a post-tax profit of Rs5.22 billion.

PABC operates a state-of-the-art facility in M-3 Industrial City, Faisalabad, with an installed capacity of 1.3 billion cans per annum, while production remained largely stable at 973 million cans in CY25 compared to 972 million cans in CY24.

PACRA observed that high entry barriers, including capital intensity, technical specialization and stringent customer certification requirements, continue to reinforce the company's market position.

Net sales rose 4% year-on-year, driven by a 10% increase in domestic volumes, which partially offset a decline in export revenues following the suspension of trade with Afghanistan and Central Asian markets in the fourth quarter of CY25.

Profitability indicators moderated during the year, with gross margin declining to 32.65% from 36.55% in CY24 and net margin falling to 21.74% from 26.46%, mainly on account of a prudent impairment charge of Rs1.17 billion against slow-moving export inventory. Earnings per share stood at Rs14.44, down from Rs16.90 in CY24.

The company's balance sheet remained strong, with shareholders' equity of Rs21.96 billion as of end-December 2025 and gearing maintained at 33%.

Liquidity was supported by short-term investments of Rs19.95 billion, primarily placed in rated mutual funds and term deposits, providing adequate financial flexibility.

Finance costs declined to Rs832 million from Rs1,022 million in CY24, reflecting disciplined liability management.

PACRA further noted that the company continues to benefit from a 10-year income tax exemption under the Special Economic Zones Act, 2012, resulting in no current tax charge during CY25.

The company's governance framework remains a key strength, characterized by a well-structured board supported by active audit and HR&R committees, and an independent internal audit function.

PABC is also progressing with a strategic initiative to establish a manufacturing presence in Afghanistan, reinforcing its long-term regional positioning.

Going forward, the ratings will continue to depend on the company's ability to diversify export markets, manage input cost pressures and sustain growth in domestic volumes amid an evolving operating environment, PACRA said.

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