April 9, 2019 (MLN): Pakistan Credit Rating agency (PACRA) has assigned initial entity ratings to MACPAC Films Limited, at ‘BBB’ for long term and ‘A2’ for short term, with a ‘stable’ outlook forecast.
According to PACRA’s press release on this occasion, the ratings reflect MACPAC Films’ established position in the packaging film (BOPP and CPP) industry. “The Company has experienced a rising top-line owing to significant demand growth of packaging material,” said PACRA.
However, increasing competition, rising raw material prices and currency devaluation has led to an overall decline in the Company's margins.
This is expected to improve, going forward, as CPP production increases. The Company has moderate leveraging and relatively weak coverages and working capital requirements are expected to rationalize on the back of higher sales, going forward, from its current levels.
The ratings are also dependent on the management's ability to strengthen the relative positioning of the Company in the industry, improvement in business margins and, in turn, profitability remains imperative. Any deterioration in the Company’s coverages or sustained would have negative impact on the ratings, stated the rating agency.
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