Press Release

VIS assigns initial Entity Ratings to Airwaves Media (Pvt.) Limited

Karachi, April 15, 2020: VIS Credit Rating Company Limited (VIS) has assigned initial entity ratings of ‘BBB-/A-3’ (Triple B Minus/A-3) to Airwaves Media (Pvt.) Limited. Medium to long-term rating of ‘BBB-’ denotes adequate credit quality; protection factors are reasonable and sufficient. Risk factors are considered variable if changes occur in the economy. The short term rating of ‘A-3’ indicates satisfactory liquidity and other protection factors, which qualify entity as to investment grade. Outlook on the assigned ratings is ‘Stable’.

Airwaves Media (Pvt.) Limited (AMPL) is engaged in business of producing and broadcasting television, radio and allied media content. The company operates and markets satellite television and radio channels. At present, AMPL is operating 1 radio channel and 3 television channels; these include RadioOne, TVOne, Waseb, and NewsOne.

The assigned ratings take into account high business risk profile, and adequate financial risk profile. Media industry is characterized by high competitive intensity, with each player competing aggressively with each other for Television Rating Points (TRPs). Moreover, Government of Pakistan (GoP), which was one largest spender on print and electronic media advertisements, has significantly reduced its spending on advertisement revenues post 2017. Furthermore, with rupee devaluation, multinational companies (MNCs), which are a big spender in terms of media advertisements, have also decreased their marketing budgets. Hence, growth in this industry will remain a function of macroeconomic situation of the country. TV channels owned by AMPL occupy mid-tier positions in terms of ratings within their respective domains; hence, competitive threat is considered significant for the company.

Assessment of the financial risk profile indicates reduction in overall profitability levels on a timeline basis, stressed liquidity profile and adequate capitalization indicators. Challenging operating environment has contributed to decrease in overall profitability. Decrease in government and MNC spending has contributed to sizeable reduction in topline of the company. Moreover, gross and net margins have depicted a declining trend due to sizeable proportion of fixed costs, especially salaries and wages. Going forward, management expects topline to sustain at existing levels in the medium term but margins to improve slightly due to cost rationalization efforts during the ongoing year. Resultantly, profitability profile may witness modest improvement in the short to medium term.

The company’s liquidity profile depicts room for improvement as cash flows are impacted by the decline in profitability and high television costs expenditure. Improvement in liquidity profile is considered important for maintenance of ratings. Equity profile of the company has depicted growth on timeline basis due to profit retention. Total debt of the company primarily comprises short term debt. Leverage indicators of the company remain on the lower side vis-à-vis peers. Maintenance of leverage indicators at existing levels is important from ratings perspective.

For further information on this rating announcement, please contact Mr. Narendar Shankar Lal (Ext: 203) or the undersigned (Ext: 207) at (021) 35311861-66 or email at

Jamal Abbas Zaidi

Applicable Rating Criteria: Corporates (April 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 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 2020 VIS Credit Rating Company Limited . All rights reserved. Contents may be used by news media with credit to VIS .

VIS Credit Rating Company Limited