Press Release

JCR-VIS Assigns Initial Ratings to Tahir Omer Industries Limited
 

Karachi, December 11, 2018: JCR-VIS Credit Rating Company Limited (JCR-VIS) has assigned initial entity ratings of ‘A-/A-2’ (Single A-Minus/A-Two) to Tahir Omer Industries Limited (TOIL). The medium to long-term rating of ‘A-’ denotes good credit quality coupled with adequate protection factors. Moreover, risk factors may vary with possible changes in the economy. The short-term rating of ‘A-2’ denotes good certainty of timely payments. Liquidity factors and company fundamentals are considered sound. Outlook on the assigned ratings is ‘Stable’.

TOIL is one of the largest players in the edible oil industry of Pakistan and is a part of Khalis Group. The company has two solvent extraction and refining units and mainly follows business to business (B2B) model. The assigned ratings take into account sizeable oilseed crushing, extraction & refining operations and established business relations with the large institutional clients operating in the edible oil and poultry feed industries. The business risk profile of TOIL is underpinned by positive demand dynamics of the said industries, a diverse range of products, and expansion of oilseed crushing operations in the recent years, resulting in sustained growth in sales and largely stable profit margins. The ratings also factor in relatively sound liquidity position and adequate debt service coverage ratios, albeit recent increase in leverage indicators.

The ratings are constrained by strong competition and inherently low margins, regulatory uncertainties and high import duties as well as increased susceptibility to risk of disease outbreaks in the poultry industry, a major buyer. The corporate governance framework and internal control systems have room for improvement. The ratings will remain dependent on maintenance of gross margins and debt leverage indicators at current levels.

For further information on this rating announcement, please contact the undersigned at 021-35311861-70 or Mr. Maimoon Rasheed at 042-35723411-13.


Javed Callea
Advisor

Applicable rating criterion: Industrial Corporate (May, 2016)
http://jcrvis.com.pk/docs/Corporate-Methodology-201605.pdf

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Information herein was obtained from sources believed to be accurate and reliable; however, JCR-VIS Credit Rating Company Limited (JCR-VIS) does not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information. JCR-VIS, the analysts involved in the rating process and members of its rating committee do not have any conflict of interest relating to the rating(s)/ranking(s) mentioned in this report. JCR-VIS is not an NRSRO and its credit ratings are not NRSRO credit ratings. JCR-VIS is paid a fee for most rating assignments. This rating/ranking is an opinion and is not a recommendation to buy or sell any securities. Copyright 2018 JCR-VIS Credit Rating Company Limited. All rights reserved. Contents may be used by news media with credit to JCR-VIS.

JCR-VIS Credit Rating Company Limited