PACRA Maintains the Entity Ratings of Packages Limited

Packages Ltd. (‘Packages’ or ‘the Company’), a flagship holding company of Ali Group, has built a healthy profile over the years. Packages Ltd holds a sizable investment book of ~ PKR 59.31bln (as of Mar-24), comprising core and strategic investments of quoted and unquoted entities. Packages Convertors Ltd holds a prominent market presence in flexible packaging, folding cartons, and consumer products (tissues). The subsidiary is anticipated to follow a growth trajectory and continue as a cash-generating investment. Additionally, Bulleh Shah Packaging is now yielding substantial dividends. The real estate venture, Packages Mall, and the international joint venture, OmyaPack, have also demonstrated significant advancement. In CY23, the Company took many strategic initiatives. The Company has acquired a significant stake in Hoechst Pakistan Ltd making its holdings to 41.07% from 6.07%. The company made an investment as equity in Packages Trading FZCO UAE with an aim to increase exports of finished goods to reduce import bills at group level. Packages Limited recognized an impairment loss on its investments in Anemone Holdings Limited.
The Company's topline remains healthy, supported by an overall growth of ~19.5% in dividend income and rental income. Bulleh Shah Packaging, and Packages Convertors Ltd, continued to share a major chunk of the company's dividend income, while rental income emanates mainly from Packages Converters Ltd and Bulleh Shah Packaging. Subsequently, the Company's profits remain sizable and are expected to remain stable as the envisaged dividends from core and strategic investments are being realized. The management is confident to hold its market presence along with improved performance. The financial profile is characterized by low leveraging and a strong consolidated position, providing comfort to the Company's ratings. The strong execution track and business acumen of Sponsors further add a shield.
The ratings are dependent upon building a consistent and augmenting dividend stream from maturing and emerging investments, respectively. Moreover, management's ability to execute its envisaged strategy of growth and expansion amidst the prevailing economic challenges remains imperative for the ratings.

About the Entity
Packages Ltd., a listed concern, was established to convert paper and paperboard into consumer packaging in 1957. The Company is classified as an investment holding company and has continued to enhance its investment book to meet the growing demand in the FMCG sector. Ali Group holds ~46.5% shares of the Company through Directors, individual family members, and its corporates; with IGI Investments (Pvt.) Ltd. owning the prime share. The Company has a free float of ~23%. Mr. Syed Babar Ali provides guidance, while Mr. Syed Hyder Ali heads the Company as its CEO/MD. They are supported by a team of experienced professionals.