Press Release

VIS Assigns Initial Entity Ratings to Sania Enterprises

Karachi, August 28, 2019: VIS Credit Rating Company Limited (VIS) has assigned initial entity ratings of ‘BBB-’/A-3’ (Triple B Minus/A-Three) to Sania Enterprises (SE), 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’.

SE is primarily engaged in the business of transportation services in Pakistan with a fleet of more than 80 buses and 15 terminals in several cities of the country. The firm generated revenue growth during last three years mainly through increased seat capacity utilization on different routes which impacted profit positively. The firm replaces old buses after completion of 5 years and purchases new ones to maintain quality standards. Since tickets are sold on cash basis, trade receivables continue to remain modest. The firm utilizes long term financial lease for the purchase of new vehicles while working capital requirements are fulfilled from internal cash flows of the firm. Debt leverage and gearing indicators increased during FY18 on account of higher utilization of long term debt while liquidity indicators and coverages remained modest. The ratings are dependent upon maintenance of current capitalization level while any significant drawings can negatively impact the ratings.

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