The Pakistan Credit Rating Agency Limited
18-Feb-19
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 Assigns Initial Entity Ratings to Reliance International Commodities Export
| Rating Type | Entity | |
|
Current (18-Feb-19 ) |
||
| Action | Initial | |
| Long Term | BB | |
| Short Term | B | |
| Outlook | Stable | |
| Rating Watch | - | |
The ratings reflect emergence of the Reliance International Commodity Exports (''Reliance'') as a growing IRRI rice exporter. In line with the overall industry changing trend, Reliance has shifted its export sales mix from China to African countries in the recent past. This has reaped better top-line growth but has also enlarged its cash conversion cycle. Reliance has marked its presence in African regions through two distribution entities and is committed to increase its foreign footing. Presence in local market remains indifferent. Profitability margins, that have a perceptible impact on the ratings, are low as compared to peers. Coverages diluted on the backdrop of higher interest costs, though still remained comfortable. Reliance's debt book solely comprises Export Refinancing Facility availed to fund its working capital needs. Bearing a sole proprietor status, the overall structure of Reliance is desirous of requisite governance and management framework. The CEO, Mr. Arif Hussain is the man behind the enterprise.
The ratings are dependent on Reliance's ability to sustain business profile and yield better profit margins. Meanwhile, prudent working capital management is imperative.
About
the Entity
Reliance International Commodity Exports is a sole proprietorship. Reliance is involved in rice export business. It is wholly owned and managed by Mr. Arif Hussain. Mr. Arif Hussain is seasoned professional with experience of more than two decades. Mr. Arif remained president of Sindh & Baluchistan Rice Millers Association for tenure of 2007-2010 and 2010-2013. M/s Sajid & Co is the external auditor of the Reliance.