Press Release

VIS Assigns Initial Entity Ratings to FM Express

Karachi, August 28, 2019: VIS Credit Rating Company Limited (VIS) has assigned initial entity ratings of ‘BBB’/A-3’ (Triple B/A-Three) to FM Express (FME), a proprietorship concern. The medium to long-term rating of ‘BBB’ denotes adequate credit quality coupled with reasonable & sufficient protection factors. Moreover, risk factors may vary with possible changes in the economy. The short-term rating of ‘A-3’ denotes timely payment of obligations coupled with satisfactory liquidity and other protection factors. Risk factors are larger and subject to more variation. Outlook on the assigned ratings is ‘Stable’.

FME is primarily engaged in the business of transportation services with a fleet of more than 350 buses/vans and 25 bus terminals in major cities of Pakistan. The firm generated revenue growth during last three years mainly through higher seat occupancy rate while profit reduced on account of higher wages, depreciation & interest expenses. With continuous replacement of old buses with new state-of-the-art buses, the firm developed its niche without facing any major threat from its competitors. Trade receivables continue to remain modest as tickets are mostly sold mainly on cash basis. The firm utilizes long term lease financing facility and equity to purchase new vehicles while lease facility is normally repaid in three years. Liquidity indicators and coverages have remained adequate. The ratings are dependent upon maintenance of current capitalization level & leverage indicators.

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

Applicable rating criterion: Corporates (May 2019)

Information herein was obtained from sources believed to be accurate and reliable; however, VIS Credit Rating Company Limited (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.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.VIS is not an NRSRO and its credit ratings are not NRSRO credit ratings.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 2019 VIS Credit Rating Company Limited . All rights reserved. Contents may be used by news media with credit to VIS .

VIS Credit Rating Company Limited