Pakistan Credit Rating Agency upgrades Rating of Hum Network Limited

Lahore, July 13, 2012 (PPI-OT): The Pakistan Credit Rating Agency Limited (PACRA) has upgraded the long-term entity rating of Hum Network Limited (HNL) to “A+” (Single A Plus), while maintaining the short-term entity rating at “A1″ (A One). These ratings denote a low expectation of credit risk emanating from a strong capacity for timely payment of financial commitments.

The ratings reflect HNL’s healthy business profile emanating from its established brand enjoying strong market position, supplemented by its experienced management team with sound understanding of the media industry. However, the revenues of the company are concentrated, majority arising from its entertainment channel, “Hum TV”. Stiff competition in the industry is keeping a check on the business margins. HNL maintains a strong financial profile featured by low-leveraged capital structure, and good coverages.

The company’s business model is characterized by long working capital cycle experiencing extension over the periods that has kept the cash flows from operations under pressure. These, however, relatively improved in the recent period.

The ratings are dependent on the company’s ability to diversify its revenues while perpetuating margins at an adequate level. Meanwhile, any stress on financial profile either by decline in business volumes, in turn, deterioration in operational cash flows or by further material increase in working capital cycle, would affect the ratings.

For more information, contact:
Hammad Rashid
Analyst
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
Email: hammad.rashid@pacra.com
Web: www.pacra.com