Press Release

VIS Revises Ratings of Haleeb Foods Limited

Karachi, June 24, 2020: VIS Credit Rating Company Limited (VIS) has revised the medium to long-term rating of Haleeb Foods Limited (HFL) from ‘A’ (Single A) to ‘A-’ (Single A Minus) while maintaining the short-term rating at ‘A-2’ (A-Two). 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 rating has been revised from ‘Stable’ to ‘Negative’. Previous rating action was taken on January 11, 2019.

HFL is a subsidiary of MEGA Foods (Pvt.) Limited, with majority shareholding. The assigned ratings take into account increasing, albeit moderate, business risk profile of the company, underpinned by overall positive demand dynamics of the dairy sector amid stiff competition. However, financial risk profile has weakened over the review period on account of continuing decline in sales mainly due to reduced demand and intense competition for tea whiteners, an established segment of HFL, along with incurring losses primarily on account of higher operational expenses.

Liquidity position is supported by investment in money market mutual funds, though internal cash generation from operations has weakened. With the erosion in equity base on account of losses and higher utilization of short-term borrowings, some increase in leverage indicators has been witnessed during the period under review. Recent decline in interest rates, fuel cost and international skimmed milk prices are expected to bode well for the company in near future. The management has taken various initiatives to arrest the declining trend in sales and become profitable; efficacy and effective implementation of these strategic initiatives remain to be seen.

For further information on this rating announcement, please contact Syed Fahim Haider at 042-35723411-13 (Ext: 8006) or the undersigned at 021-35311861-70 (Ext. 201) or email at

Faryal Ahmad Faheem
Deputy CEO

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 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