VIS Maintains Ratings of Haleeb Foods Limited - Press Release issued by VIS Credit Rating Company Limited.

Karachi -- September 29, 2022 (PPI-OT)

Following is the text of press release issued by VIS Credit Rating Company Limited

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VIS Credit Rating Company Limited (VIS) has maintained the entity ratings of Haleeb Foods Limited (HFL) at 'A-/A-2' (Single A-Minus/A-Two). The medium to long-term rating of 'A-' signifies good credit quality with strong protection factors. Moreover, risk factors may vary with possible changes in economy. The short-term rating of 'A-2' denotes good certainty of timely payments coupled with sound liquidity and company fundamentals. Outlook on the assigned ratings is revised from 'Negative' to 'Stable'. The previous rating action was announced on July 29, 2021.

The ratings assigned to HFL take into account moderate business risk environment underpinned by presence of the company in fast moving consumer goods (FMCG) segment coupled with positive demand prospects of dairy products in line with population growth and higher per capita consumption. However, competitive pressure in the industry remains high with two strong players accounting for 90% of the market share, leaving little room for price maneuvering in a challenging operating environment.

Revision in rating outlook takes into account improvement in operating profitability profile contributed through strategic shift in product mix and reliance on in-house produced milk powder. Previously, the Company was importing powder milk, which is now being met in house, thereby reducing foreign currency exposure of the Company. Ratings remain underpinned on achievement of higher margins as per the projected plans of the Company. Given, revenue generation in...