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PACRA Maintains Entity Ratings of Air Link Communication Limited

Lahore, November 23, 2022 (PPI-OT):Air Link Communication Limited (“Airlink” or “the Company”) is principally engaged in the distribution and retail business followed by assembling of mobile devices and allied items in Pakistan. The ratings reflect Airlink’s sustainable business fundamentals underpinned by its solid market position. The Company is the official partner of multiple leading global brands to ensure diversified earnings from its core business line. Pakistan’s telecom industry is one of the fastest growing segments of the economy.

With successful execution of DIRBS, the local assembly industry has evolved from infancy to well growing stage. Government of Pakistan introduced a comprehensive Mobile Manufacturing Policy to attract manufactures to Pakistan and establish their plants. PTA has issued MDM authorizations to 30+ foreign and local companies to create more jobs in technical sector and enable consumers to buy locally. During first nine months (Jan-Sep) of 2022, the local plants manufactured/assembled ~16.7mln handsets as compared to ~1.24mln commercially imported ones. Favourable policies, trade and investment liberalization, and healthy competition promoting shared industry prosperity.

Following, the Company captures market share of around ~22% in mobile phone distribution. On an accumulated basis, topline of the Company continued to witness reasonable growth on a Year-on-Year basis primarily on back of higher prices, followed by more volume. During FY22, Airlink joined hands with Xiaomi, a global electronics and smartphones brand, to manufacture/assemble Xiaomi mobile phones in Pakistan through its wholly owned subsidiary “Select Technologies (Pvt) Limited” for which the commercial production was initiated in Mar-22.

Further, the Company retained its profitability matrix despite tough macroeconomic conditions and high cost of doing business. Funds received through IPO ramped up Company’s equity base; keeping capital structure moderately leveraged mainly comprised of STBs. With its legal status converted into a Public Listed Entity, several improvements in the governance structure were witnessed including induction of independent directors. Financial risk profile of the Company is reflected by slightly stretched working capital cycle, comfortable coverages, and healthy cash flows.

The ratings are dependent on the Company’s ability to sustain its relative position amidst changing industry environment. As business grows, prudent financial discipline – particularly in working capital structure, is essential to uphold 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: +92-42-5869504-6
Fax: +92-42-5830425
Email: hammad.rashid@pacra.com
Website: www.pacra.com

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