KARACHI: VIS Credit Rating Company Limited has reaffirmed entity ratings of triple B plus/A two to CBM Plastics (Private) Limited. The long-term rating of ‘BBB+’ signifies 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-2’ signifies good certainty of timely payment. Liquidity factors and company fundamentals are sound. Access to capital markets is good. Risk factors are small. Outlook on the assigned ratings is stable. Previous rating action was announced on Oct. 06, 2020, said release on Tuesday.
Reaffirmation of the assigned ratings encapsulates strong position in the OMC segment, whereby CBM Plastics is the market leader in supplying ‘lube oil’ containers with a sizeable share of the segment. Concentration risk in the segment is on the higher side which is mitigated through long-term business relationships with clients.
The plastics industry derives demand from critical revenue generating industries which are expected to grow in tandem with improved economic indicators of Pakistan, thus implying a positive industry outlook.
Assessment of financial risk profile incorporates positive momentum in profitability during FY21. The company recorded volume driven growth during the outgoing year, and expects the same going forward on the back of expected improvement in macroeconomic environment.