The Pakistan Credit Rating Agency Limited
28-Jun-18
Analyst
Ayesha Qasim
ayesha.qasim@pacra.com
+92-42-35869504
www.pacra.com
Applicable Criteria
Related Research
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PACRA Maintains Entity Ratings of HUM Network Limited
| Rating Type | Entity | |
|
Current (28-Jun-18 ) |
Previous (30-Dec-17 ) |
|
| Action | Maintain | Maintain |
| Long Term | A+ | A+ |
| Short Term | A1 | A1 |
| Outlook | Positive | Positive |
| Rating Watch | - | - |
The ratings reflects HNL's ability to capacity its robust market position in the domestic media industry. HNL enjoys healthy financial profile supported by less leveraged capital structure, sound coverages and decent profitability. With strong presence of HUM TV, HNL's flagship channel in entertainment segment, HNL has aided from increasing advertisement spent in Pakistan. This is evident in turnover growth along with relatively stable margins. Reported margins depict slight dilution on account of lately launched news channel. HNL is growing in ancillary domains including publications and holding events. Recently, HNL has taken an initiative to exploit opportunities available through e-commerce by launching its online store named "Hum Mart", a 24 hrs deliery online grocery store.
With the launch of Hum News, HNL plans to model the elements of modern journalism - enterprising, investigative, events-driven, data-based and audience focused. HNL is expected to capitalize on its strong presence in the entertainment segment to help thrive its News Channel.
Positive outlook highlights the company's business initiatives which are likely to strengthen its business profile besides bringing diversification in revenue streams. Moreover, preserving the sound capital structure is important. At the same time, upholding high governance standards would remain important.
About
the Entity
HNL, listed on PSX, commenced its operations in January 2005. Over the recent period, the company's shareholding has experienced changes. Sponsoring family continues to have majority stake (29%), mainly held by Duraid Qureshi (the CEO). THS Kingsway Fund (16.3%), Stitching General Holdings (13.2%) and ACACIA Partners LP (3.4%). The rest (~38%) is spread amongst institutions and individuals.
The Board comprises nine members including five from sponsoring family, one independent, two non-executive and one executive director. From five sponsoring family directors, three are non-executive while the remaining two hold executive positions - ED (Sultana Siddiqui) and CEO (Duraid Qureshi). Momina Duraid, CEO M.D. Productions (Pvt.) Ltd, has lately joined the Board as non-executive director. The management team of the company comprises well-qualified and seasoned professionals of the media industry. The CEO and the ED have extensive experience in television production and media marketing.