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The Pakistan Credit Rating Agency Limited
Press Release

Date
24-Dec-20

Analyst
Faraan Taimoor
faraan.taimoor@pacra.com
+92-42-35869504
www.pacra.com

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This press release is being transmitted for the sole purpose of dissemination through print/electronic media. The press release may be used in full or in part without changing the meaning or context thereof with due credit to PACRA

PACRA Maintains Entity Ratings of HUM Network Limited, Assigns ‘Rating Watch’ and ‘Developing’ Outlook

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

The ratings incorporate HUM Network's ability to uphold its relative market position in the domestic media industry. With an appreciable presence of HUM TV - the company's flagship channel in entertainment segment, HUM Network has expanded into multiple TV ventures on a timeline basis including Hum Masala, Hum Sitaray and Hum News. The company has suffered losses as a result of COVID-19, which curtailed the advertisement spend. This is coupled with the cash outflow amidst of the launch of News Channel. The ratings, however, take into consideration on-balance sheet liquidity to support the overall risk profile of the company though the revival from losses is essential. The management is also eyeing new revenue streams; they are looking at increased revenue from the News Channel, which is expected to reach break-even over the medium horizon.

The company is unable to hold its Annual General Meeting due to legal proceedings pertaining to the election of directors. Therefore, financial statements cannot be released till the Annual General Meeting is conducted. As a consequence, HUM Network Limited has been assigned 'Rating Watch' and ‘Developing’ Outlook. PACRA will monitor the proceedings and update the ratings accordingly.
The ratings are dependent upon sustained business profile of the company. Improvement in financial risk profile is vital. Prolonged downturn in the bottom line would have an adverse impact on the credit rating of the company.

About the Entity
HUM Network Limited, listed on Pakistan Stock Exchange, commenced its operations in January 2005. Shares of the Sponsoring family equate to (~29%) - Mr. Duraid Qureshi (~24%) and Mr. Shunaid Qureshi (~5%).

The company is one of the largest media houses of Pakistan that has a diversified portfolio of business. Mr. Duraid Qureshi is the CEO of the company. He is supported by a team of experienced professionals.

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.