The Pakistan Credit Rating Agency Limited
24-Dec-20
Analyst
Faraan Taimoor
faraan.taimoor@pacra.com
+92-42-35869504
www.pacra.com
Applicable Criteria
- Methodology | Corporate Ratings | Jun-20
- Methodology | Correlation Between Long-Term And Short-Term Rating Scale | Jun-20
- Criteria | Rating Modifier | Jun-20
Related Research
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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.