The Pakistan Credit Rating Agency Limited
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Sohail Ahmed Qureshi

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PACRA Maintains Entity Ratings of Airlink Communication Limited

Rating Type Entity
(24-Dec-20 )
(27-Dec-19 )
Action Maintain Maintain
Long Term A- A-
Short Term A1 A1
Outlook Stable Stable
Rating Watch - -

The ratings denote Airlink’s adequate operational sustainability underpinned by its solid market position and diversified earnings from its mobile distribution business. Over the last few years, the Company has improved its business profile. Topline is witnessing an ample growth on a Year-on-Year basis owing to the formidable demand of mobile handsets in the country. Global tension among Huawei and USA were expected to hamper the business volumes of the country. However, Airlink has been successful in subduing the challenge by replacing the foregone Huawei offtake with the sales of a new brand - Tecno. Additionally, sales of new brands including Apple, Itel & Alcatel have also augmented the topline. With its legal status converted to a Public Unlisted Entity in Apr'19, several improvements in the governance structure are witnessed including induction of three independent directors. Move is on the horizon for public listing. The company’s import driven business model is mandated to be secured against cash margin with insurance for the in-transit; short term debt book, therefore, appears ballooned on account of regulatory compliance of import contracts - effective working capital strategies are imperative. Financial risk profile is demonstrated by sanguine free cash flows from operations (FCFO) and leveraged capital structure.
The ratings are dependent on the company’s ability to sustain its relative position and positive performance indicators amidst growth. As business volumes grow, prudent financial discipline - particularly in capital structure, is essential to uphold the ratings.

About the Entity
Airlink was formed in 2010 as a partnership firm for the import and distribution of IT products and related services. In 2014, a new private company was incorporated simultaneously to take over the business of the partnership firm running as a family business. After July 2018, the entire business of the partnership was transferred to the company's books. The Company got converted to a Public Unlisted Entity in Apr'19. It is owned by individuals of the sponsor family. Mr. Muzaffar Hayat and the family of his late brother - Mr. Muazzam Hayat Piracha are the current board members and the major shareholders of the company. In addition to those family members, company has also appointed 3 independent directors on its board.
Mr. Muzaffar Hayat Piracha is the CEO of the company. He has the overall experience of 27 years. He is being assisted by experienced professionals. EY Ford Rhodes Chartered Accountants is the external auditor of the company.

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.