PACRA Maintains Entity Ratings of Descon Oxychem Limited - Press Release issued by The Pakistan Credit Rating Agency Limited.

Lahore -- July 02, 2020 (PPI-OT)

Following is the text of press release issued by The Pakistan Credit Rating Agency Limited (PACRA)

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The ratings recognize Descon Oxychem's leading position in the local Hydrogen Peroxide (HPO) market, supplemented by efficient production processes, sound technological infrastructure and effective control environment. One of the only two manufacturers in Pakistan's market, Descon Oxychem has gradually strengthened its footprint; particularly in the North region. The recent upturn in global HPO prices accompanied by Pakistan Rupee devaluation has impacted the Company's profitability positively. However, since COVID-19 outbreak and subsequent lockdown, HPO prices have gone down despite further rupee devaluation due to lower demand, especially from the textile sector.

Demand from textile is expected to remain low despite eventual easing of lockdown and resumption of operations. The Company managed to sustain its revenue during these challenging times through product diversification. The Company has introduced multipurpose disinfectant / sanitizer products to support its business profile. Meanwhile, the financial risk profile remains strong characterized by efficient working capital management and strong coverages.

The Company has converted long term loan obtained for an...