The Pakistan Credit Rating Agency Limited
31-Dec-18
Analyst
Ayesha Qasim
ayesha.qasim@pacra.com
+92-42-35869504
www.pacra.com
Applicable Criteria
- Methodology | Corporate Ratings | Jun-18
- Methodology | Criteria | Rating Modifier | Jun-18
- Methodology | Correlation Between Long-Term And Short-Term Rating Scale | Jun-18
Related Research
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PACRA Upgrades Entity Ratings of Airlink Communication
| Rating Type | Entity | |
|
Current (31-Dec-18 ) |
Previous (10-Jul-18 ) |
|
| Action | Upgrade | Maintain |
| Long Term | A- | BBB+ |
| Short Term | A1 | A2 |
| Outlook | Stable | Stable |
| Rating Watch | - | - |
The ratings denote Air Link’s adequate operational sustainability underpinned by its solid market position, balanced earnings contributions from its mobile business, as well as its strong financial profile. Association with strong brands, Huawei & Samsung, enables Air Link to propel the growth wheel forward.
Over the last few years, the Company has improved its business profile. The company’s topline is witnessing ample growth mainly because of increase in sale of Huawei and Samsung. FCFO of the company witnessed decent improvement owing to higher EBITDA. All the operations of the group are now formally transferred to Airlink Communication (Private) Limited. Improvement in governance structure is being witnessed as the company is inducting three independent directors on the board. The company’s import driven business model is secured against cash margin with insurance for the in-transit. The company's financial risk profile is adequately covered. The company has enduring emphasis on control environment, as endorsed by the sponsors. A reflection of this is transition towards corporate structure and audit quality. Move is on the horizon for public listing. Ratings incorporate that Air Link operates in a fast moving market where timely introduction and sale of products is crucial. The growth in revenue is expected to increase further with the implementation of DIRBS system.
The ratings are dependent on the company’s ability to strengthen its market position, gain in terms of EBITDA and profitability margins. Continuous improvement in governance structure is essential for the ratings. Seamless financial discipline is important.
About
the Entity
AirLink incorporated in 2014, is a private limited company. The Company is principally
involved in distributing mobile phones of two leading brands in industry; Huawei and Samsung and recently signed Xiaomi. The Company is owned by sponsoring family. Mr. Shaukat Hayat Piracha, Mr. Muzaffar Hayat and Mrs. Saliha Basit are the current board members and the major shareholders of the company.
Mr. Muzaffar Hayat Piracha is the CEO of the company. He has the overall experience of 26 years. He is being assisted by experienced professionals. EY Ford Rhodes Chartered Accountants is the external auditor of the company and they have expressed un-qualified opinion on financials for period of FY18.