Lahore, August 20, 2019 (PPI-OT): 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.
For more information, contact:
The Pakistan Credit Rating Agency Limited (PACRA)
Awami Complex, FB1, Usman Block New Garden Town,
Lahore – Pakistan
Tel: +9242 586 9504 -6
Fax: +9242 583 0425