Tag: second largest

September 28, 2020: VIS Credit Rating Company Limited (VIS) has assigned the initial entity ratings of ‘A/A-2’ (Single A/A-Two) to Mughal Iron & Steel Industries Limited (MISIL). The medium to long-term rating of ‘A’ denotes good credit quality coupled with adequate protection factors.

Moreover, risk factors may vary with possible changes in the economy. The short-term rating of ‘A-2’ denotes good certainty of timely payments. Liquidity factors and company fundamentals are considered sound. Outlook on the assigned rating is ‘Stable’.

MISIL is considered one of the major players in the long steel sector of Pakistan. Product portfolio of the company comprises steel rebars, girders and t-iron. Steel rebars and girders are the key revenue generating products. The assigned ratings take into account extensive experience of sponsoring family who has been involved in the steel sector since 1950. The ratings draw comfort from sizeable scale of melting and re-rolling mill capacities, underpinned by installation of two new furnaces and completion of balancing, modernization and replacement (BMR) of existing re-rolling mill in 4Q2020.

While the company exhibited healthy increase in revenue and profits in the past few years, slowdown in economic activity and outbreak of COVID-19 has adversely affected financial performance during 9MFY20. Gross margins declined as the company could not pass the full impact of higher raw material prices onto consumer. However, the ratings factor in projected growth in volume sales, underpinned by recent uptrend in rebar prices, which along with the completion of BMR of re-rolling mill, is expected to bode well for the margins to some extent due to energy and overheads efficiencies.

Liquidity position of the company was also under stress owing to significant decline in cash flows generation mainly as a result of higher finance cost and taxes paid, which resulted in low debt service coverage. While improvement in cash flow generation is expected in FY21 and beyond on account of higher projected profits along with an expected major tax benefit, coverages are projected to remain slightly above the minimum threshold over the next three years as major debt repayments would fall in that period.

Increase in equity base is attributable to internal capital generation and contribution from sponsors. Debt profile of the company comprises a mix of short-term and long-term financing facilities. Working capital requirements are met through short-term borrowings. The company has also mobilized long-term debt during the period under review to finance the said BMR. Resultantly, though manageable, gearing and debt leverage were slightly on a higher side.

With the issuance of Sukuk instrument and higher short-term borrowings for working capital requirements, leverage indicators are projected to increase in FY21 and decrease subsequently. Going forward, the ratings are dependent on achievement of projected revenue and profits, improvement in cash flow generation and coverages, and maintenance of leverage indicators within prudent limits. While the demand for steel sector is showing signs of recovery on account of construction industry relief package and the government’s spending on construction of development projects, sustainability of demand over the long-term period will be an important rating factor.

VIS

September 28, 2020 (MLN): The Union of Small and Medium Enterprises (UNISAME) has invited the attention of all stakeholders by stating that the responsibility of promotion and safeguarding the reputation of basmati lies on all and they need to protect it collectively with dedication.

President UNISAME Zulfikar Thaver said that UNISAME is proud of all the state institutions who have rolled up their sleeves to challenge the Indian exclusive geographical indications (GI) tag for basmati to the European Union. The Indian exclusive claim is based on malfides as Indians on several occasions have admitted in world forums that basmati belongs to both India and Pakistan. Some Indian courts have also given judgement in the matter and defined basmati judiciously.

Unisame has received firm commitment from the state institutions of leaving no stone unturned to protect Pakistan's rights and has appealed to all rice exporters to make special efforts to promote the export of basmati rice globally.

Thaver also requested the farmers to grow more basmati and adopt best technology to get best yield to remain competitive.

UNISAME also urged the Intellectual Property Organization ((IPO) and the Registrar Trade Marks to expedite the pending cases and decide in the best interest of justice. The SME union also appealed to the Sindh High Court to take up the matter on top priority basis and conclude in the best interest of justice to enable the stakeholders substantiate their cases based on their fair judgements in world forums.

September 28, 2020 (MLN): Avanceon Automation and Control W.L.L., a subsidiary of Avanceon Limited based in Qatar, has secured a multi-million-dollar contract to operate and maintain SCADA Systems for the Lusail Utility Tunnel. Avanceon’s After Market Support division will provide operational and maintenance services onsite from 2019 till 2024.

Lusail City is situated on the coast in the northern part of the municipality of Al Dayaan. As the newest planned city in the state of Qatar, Lusail is being developed as part of the Qatar National Vison 2030. Once completed, Lusail City will boast a population of 450,000 made of 200,000 residents, 170,000 employees and 80,000 visitors.

The CP1 Utility Tunnel is approximately 18 km long with cross lateral sections of tunnel to service the Lusail development marina plots. All access and control of the systems within the tunnel are overseen by SCADA in a central control room. The access control and CCTV at all entrances, exits, and fan rooms are being monitored by SCADA. Avanceon will be responsible for operations, maintenance and troubleshooting of SCADA systems.

The Scope of Work on this project for Avanceon entails the following,

• Service of Operations, Preventive and Corrective Maintenance as per best practices and OEM standards
• Guarantee Performance Management KPIs by ensuring Reactive Maintenance, Planned Preventive Maintenance and System Availability
• Deployment of Certified Maintenance Engineers, MEP Supervisors, SCADA Operators and Technicians
• Adhere to all maintenance response times and protocols to mitigate immediate risk to Health & Safety and Business Critical Systems.

Avanceon began operational and maintenance services for Lusail Utility Tunnel CP1 from November 1, 2019 and the contract will conclude on October 31, 2024 with the possibility of further renewal.

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September 28, 2020 (MLN): Gul Ahmed Textile Mills has reported losses of Rs. 625.7 million (LPS: 1.46) for the Financial Year 2020, as opposed to the earnings of Rs. 3.6 billion recorded last year.

The decline in profitability was a clear outcome of lower sales, which fell by 5.5% during the year. This led to gross profits decreasing by 24%.

Where no substantial changes were observed in the major expense heads, the other operating expense showed a decline of 15.3%. On the other hand, the non-core income plummeted by 68.5%, further straining the financial position of the company.

There was also a 36.7% increase in the finance cost owing to higher interest rates and short-term borrowings by the company.

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September 28, 2020 (MLN): The Board of Directors of the Security Investment Bank Limited (SIBL), in their meeting held on September 26, 2020, has approved the transformation of SIBL into Micro Finance Bank at province level.

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