PACRA Assigns Initial Entity Rating to Askari Cement Limited

Lahore, August 09, 2018 (PPI-OT): Askari Cement’s ratings reflect the strong position in the cement industry from its sustained profile. The Company has two existing cement manufacturing units (Nizampur and Wah) – operating with combined capacity of 2.8mln tpa. Over the last few years, the company was able to maintain growth trajectory trend in revenue, supported by strong cement sector fundamentals. The company secures healthy margins – in line with general sector phenomenon.

The business profile of the company is likely to stay stable due to strong sector fundamentals, maintained volumes and sustained EBITDA. The upcoming projects include BMR at Nizampur plant and WHR at Wah plant. Hence, currently financials are moderately leveraged. However, cashflows provide good coverage to anticipate repayment. Going forward, leveraging is expected to remain at comfortable level. The ratings take comfort from strong financial strength of Fauji Foundation – third largest sponsoring group in the cement industry.

The ratings are dependent on current positioning of the company’s business besides financial risk profile; strengthening of equity base is essential. Any significant deterioration in the sector’s outlook particularly any unfavourable change in demand and expansion matrix, thereby exerting pressure on prices and margins, may negatively impact the ratings.

For more information, contact:
Analyst
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
Email: hammad.rashid@pacra.com
Web: www.pacra.com