The Pakistan Credit Rating Agency Limited
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Muhammad Usman

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PACRA Maintains Entity Ratings of Reliance International Commodities Export

Rating Type Entity
Action Maintain Initial
Long Term BB BB
Short Term B B
Outlook Stable Stable
Rating Watch - -

The ratings reflect the emergence of the Reliance International Commodity Exports (''Reliance'') as a growing IRRI rice exporter. In line with the overall industry changing the trend, Reliance has shifted its export sales mix from China to African countries in the recent past. This has not only reaped better top-line growth but enlarged its cash conversion cycle. Reliance has marked its presence in African regions through two distribution entities. The company is committed to increasing its foreign footing. Presence in the local market remains indifferent. Profitability margins, that have a perceptible impact on the ratings, are low as compared to peers. The company's topline and profitability is expected to be sanguine, as also expected from the reported financial statements. Reliance's debt book solely comprises Export Refinancing Facility availed to fund its working capital needs. During FY19, rice crop area stood at 2.8 million hectares. The production stood at 7.2 million tonnes as against 7.5 million tonnes last year, short by ~3.3%. During FY19, Pakistan exported a total of 4.097 million metric tons of rice compared to some 4.082 million metric tons in the corresponding period of FY18.
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 a seasoned professional with experience of more than two decades. Mr. Arif remained president of Sindh & Baluchistan Rice Millers Association for the tenure of 2007-2010 and 2010-2013. M/s Sajid & Co is the external auditor of the Reliance.

The primary function of PACRA is to evaluate the capacity and willingness of an entity to honor its obligations. Our ratings reflect an independent, professional and impartial assessment of the risks associated with a particular instrument or an entity. PACRA's comprehensive offerings include instrument and entity credit ratings, insurer financial strength ratings, fund ratings, asset manager ratings and real estate gradings. PACRA opinion is not a recommendation to purchase, sell or hold a security, in as much as it does not comment on the security's market price or suitability for a particular investor.