VIS maintains ratings of TOMCL

December 19, 2022 (MLN): The Organic Meat Company Limited (TOMCL) has informed that the VIS Credit Rating Company Ltd. (VIS), a 'Full-Service rating agency, has maintained the entity ratings of ‘A-/A-2’ of company, the company’s stock filings on the stock exchange showed.

The medium to long-term rating of ‘A-’ signifies good credit quality with adequate protection factors. Moreover, risk factors may vary with possible changes in the economy.

Furthermore, the short-term rating of ‘A-2’ denotes good certainty of timely payments coupled with sound liquidity and company fundamentals. Outlook on the assigned ratings has been changed from ‘Stable’ to ‘Positive’.

The ratings assigned to TOMCL take into account its market positioning as the major player in the meat export market, having the largest capacity from slaughtering to packaging, the highest halal meat export receipts, the only offal processor in the formal meat sector, and access to 16 export jurisdictions.

“The ratings take comfort from the company’s business model being leaner than peers leading to the rationalization of operating expenses and the majority of exports carried out through sea routes to gulf countries, which provide an added advantage in terms of freight charges compared to peers who use air cargo facility”, the report added.

Moreover, the positive outlook is assigned on account of an ongoing equity injection proposal of 30% from a prominent Saudi organization expected to materialize during the ongoing year followed by several initiatives undertaken by the company to improve market penetration.

“A new product line development with the introduction of pet food and product line extension with the aim to export cooked meat products to the Chinese market”, it added.

Further, the assessment of the financial risk profile encapsulates revenue growth in the outgoing year and onwards with the subsequent translation of the same into profitability metrics.

In line with planned growth, the scale of operations increased and the liquidity position improved; the same is considered sound on account of sufficient cash flow generation in terms of outstanding liabilities.

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