PACRA Maintains Entity Ratings of Pioneer Cement Limited

Islamabad, May 07, 2018 (PPI-OT): The ratings reflect Pioneer Cement’s healthy business profile supplemented by strong EBITDA margins and improved revenue stream. Pioneer Cement’s sales are majorly driven by local market fundamental – a factor of plant location whereby local sales are feasible versus exports. The factors like i) sales focus on nearby geographies – thereby reducing distribution expense and ii) achieving higher capacity utilization level has benefited the Company’s EBITDA.

The upcoming energy projects (12MW WHRPP and 24MW coal power plant) are likely to assist bottom-line in future through significant power cost savings. The financial risk profile of the company is strong on account of low leveraged capital structure along with healthy coverages and is expected to remain low in medium term. The ratings draw comfort from sponsor’s financial strength.

The ratings are dependent on the management’s ability to (i) uphold margins, and (ii) optimal utilization of existing lines. Any significant deterioration in the sector’s outlook particularly any unfavourable change in demand and expansion matrix, thereby exerting pressure on prices and margins, may negatively impact the ratings.

For more information, contact:
The Pakistan Credit Rating Agency Limited (PACRA)
Awami Complex, FB1, Usman Block New Garden Town,
Lahore – Pakistan
Tel: +9242 586 9504 -6
Fax: +9242 583 0425