Anam Waqas Ghayour
PACRA maintains entity ratings of Matracon Pakistan (Pvt) Limited
Matracon or (the Company) has delivered multiple, public and government projects of which the completion spanned a number of years. Matracon embarks upon large infrastructure projects in collaboration with different international JV partners including Chinese and Japanese, which in their own right are established institutions. Matracon was originally focused on roads construction and drainage systems, but recently the Company is focusing on designing buildings. Construction industry’s prospects seems to be promising in terms of local housing societies being build up, civil works related to CPEC and otherwise all around the country. Matracon topline moderately impacted in 1HFY22 and reported to PKR 5.6bln as compared to FY21 PKR 9.9bln and IHFY21 4.8bln, owing to increase in raw material prices and substantial completion of projects in hand. The trends towards the full year is yet to be seen. Volatility associated with award of projects and hence, sustainability of revenues, cannot be overlooked as the business pipeline is not swelled up. The pressure on margins still remains critical, this is owing to tougher competition and rise in prices of raw materials especially cement and steel. The business funding needs are met by non-funded lines of banks. Equity base of Matracon is adequate especially when compared with the non-funded obligations assumed by the Company.
The ratings are dependent on the sustainability of the business and its financial structure; sustaining a steady revenue stream and timely completion of projects without any significant cost and time overruns. In addition strengthening of projects pipeline and collection efficiency, as projected, will remain crucial to ratings. Any prolonged downturn in subdued business volume can have a detrimental effect on the rating. Improvement in governance and control environment is also important and needs to be strengthened.
Matracon Pakistan (Pvt) Ltd. was established by Mr. Abdul Qadir in 1996 and later on converted into private limited company in 2006. The executive and operational roles are held by Mr. Abdul Qadir and Mr. M Ayub who are the only board members and 'Active' shareholders. Crow Hussain Chaudhary-Chartered Accountants, is the external auditor of the Company. The auditors have expressed an unqualified audit opinion on the financial statements of Matracon Pak for the year ended June 30, 2021.The main expertise of Matracon Pak historically has been in projects relevant to NHA related projects, however the focus is now being shifted towards construction of buildings and commercial towers as well. Scope of work comprises construction of roads, bridges, tunnels, canals and drainage systems. Significant projects to its credit including the mega construction projects of almost (PKR ~49bln) out of which projects worth of PKR ~30bln has been completed whereas remaining projects worth of PKR ~10.26bln is in progress with other Government and semi-Government Departments.