PACRA Maintains Entity Ratings of Multinet Pakistan (Pvt.) Limited

The ratings of Multinet Pakistan (Pvt.) Limited ("Multinet" or the "Company") reflect its robust business profile and solid standing within Pakistan’s telecommunications industry. Multinet is a leading technology Company renowned for delivering innovative, high-impact solutions tailored to the evolving needs of businesses. Driven by a deep commitment to technological excellence and client success, the Company empowers organizations to thrive in today’s digital landscape. Multinet’s comprehensive solutions portfolio includes Metro Fiber and Long Haul Networks, Tower Fiber infrastructure, Data Centers, Cloud Platforms, Information Security services, and Global Communication Assets. Backed by extensive industry experience and a forward-looking approach, Multinet has established a strong reputation for providing reliable, cutting-edge technology solutions to businesses across Pakistan. The Company offers a suite of value-added services such as voice solutions, data center services, audio and video conferencing, as well as application and server hosting. The assigned rating reflects a sound governance framework, a strong control environment, and a highly qualified and experienced management team. Furthermore, the company has proactively enhanced its governance structures, evidenced by the strengthening of its Board. The Company secured a loan facility from HBL, backed by a guarantee from InfraZamin. The facility was originally sanctioned at PKR 2.1bln and was intended to finance the procurement of data center racks, expansion of long-haul capacity, metro network development, tower fiberization, and the maintenance of the Debt Service Reserve Account (DSRA). However, following an increase in markup rates, the facility amount was revised to PKR 1.0bln. The proceeds have since been utilized for the installation of 100 additional data center racks, expansion of the metro fiber network, tower fiberization, and the ongoing maintenance of the DSRA. The Company's topline recorded a 6.8% increase, primarily driven by the robust performance of its domestic operations. Notably, the Enterprise business unit posted a growth of 15%, reflecting increased demand for integrated ICT solutions and enterprise connectivity services. Similarly, the Carrier Domestic business unit delivered a strong performance with a 20% growth rate, attributed to the expansion of wholesale domestic traffic and infrastructure leasing. In contrast, the Carrier Business Unit International and Long Distance International segments experienced a decline in revenue due to shift in communication trends which continue to impact the topline. The Company demonstrated enhanced profitability, with the gross profit margin expanding by 16%, indicative of robust cost containment strategies. This positive momentum cascaded down to the operating profit, which also recorded an improvement. Net profit margin experienced a substantial uplift of 116%, primarily driven by optimized overall expense management. Concurrently, debt coverage metrics have strengthened, reflecting an improvement in FCFO. The Company continues to uphold a conservative capital structure, as evidenced by an improved leverage ratio.
The ratings are dependent on the management's ability to realize the projected margins, working capital cycle and coverages.

About the Entity
Multinet Pakistan (Pvt.) Limited was incorporated in 1996, as a private limited Company. Primary business activity of the Company is to provide telecommunications infrastructure and services. Major shareholding (99%) resides with Mr. Adnan Asdar Ali. The product slate of the Company comprises provision of broadband & data connectivity related services to corporates, long-haul and metro optical fiber infrastructure requirements for telecom operators, international voice termination, fixed line telephony, and partnering with global carriers to provide broadband and data connectivity solutions to their customers operating in Pakistan. Moreover, it also provides value added services such as voice services, data center, audio and video conferencing, hosting applications and servers.