PACRA Maintains Entity Ratings of Gharibwal Cement Limited

Lahore, November 16, 2018 (PPI-OT): The ratings reflect Gharibwal Cement’s strength in its key markets. The company focuses on geographies closer to the plant location; Gujranwala division remained company’s home market. Owing to current demand situation, the company decided to delay its capacity enhancement plan by two years. The company’s business profile remained adequate on account of decreased operating and EBITDA margins and squeezed profitability.

The company’s margins squeezed, industry wide phenomenon, on account of; 1) international coal prices hike and relevant duties 2) increase in FED 3) dip in cement prices. The financial profile of the Company is expected to remain adequate. The leveraging is expected to remain at same level owing to delay in expansion planning. The ratings draw comfort from sponsor families, having prime focus of the company.

The ratings are dependent on upholding of the company’s business vis-à-vis financial risk profile in current economic scenario. Industry’s dynamics encompassing expected challenges of supply glut, substantial decline in local demand or deterioration in cement prices will negatively affect 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