PACRA Maintain Entity Ratings of Prosperity Weaving Mills Limited
Lahore, December 28, 2017 (PPI-OT):The ratings reflect Prosperity Weaving’s adequately maintained business profile despite suppressed domestic textile sector fundamentals. The company’s revenues have recently started to pick up, benefiting from local volumes. Recent proposal to tax imported fabric should help margins. Meanwhile, support from core business margins is dependent upon efficiency gains via technology upgrades as well as yarn and energy prices in the country.
Prosperity Weaving has gradually build a sizable investment portfolio; though conservatively investing in blue chip stocks, market risk remains. Financial risk remains stretched owing to additional debt for regular BMR, and restricted operating cash flows. However, the assigned ratings derive comfort from the company’s liquid investments, ability to manage financial risk, and its association with Nagina Group. The ratings may be impacted in case pressure develops on financial profile due to further accumulation of debt without build up of matching cash flows.
For more information, contact:
The Pakistan Credit Rating Agency Limited (PACRA)
Awami Complex, FB1, Usman Block New Garden Town,
Lahore – Pakistan
Tel: +9242 586 9504 -6
Fax: +9242 583 0425