Lahore, November 05, 2021 (PPI-OT):Orient Rental Modaraba (ORM or the Modaraba) is a multi-purpose perpetual Modaraba, having focal operations in two segments; Ijarah Rental (Genset Rental) and Operations and Maintenance (O and M) agreements. The Modaraba enjoys patronage from its sponsors (ASJN Group), with additional benefits gained through its complementary business nature. The presence of key Group Management personnel in the Modaraba boosted ORM’s operational efficiency, consequently, enduring economic instability caused by COVID-19 pandemic. The economy gained momentum in the aftermath, in turn, translating into a performance boost for the Modaraba. Ijarah rentals remained the dominant revenue source, capturing major share in the textile sector.
Additionally, stable returns generated from O and M arrangements placed further comfort to the topline. The rating takes comfort from the experienced management and stable performance of the Modaraba. There are plans to further augment O and M revenue stream as the demand mix tilts towards the latter. The Modaraba has been profitable on account of high utilization of rental fleet, due to increasing demand for power generation equipment offered. Financial strength of the company remains adequate. The Modaraba intends to keep leveraging in the manageable range, not more than debt equity of 40:60, with minimal reliance on COMs. Going forward, the Modaraba intends to maintain optimal capacity utilization and further augments its control and governance environment.
The ratings are dependent on relative positioning of the Modaraba in the sector and sustained asset quality: sustaining bottom line profitability is important. The ratings also depend upon keeping its financial profile intact. Any significant change in its risk profile may adversely impact the ratings.
For more information, contact:
Analyst,
The Pakistan Credit Rating Agency Limited (PACRA)
Awami Complex, FB1, Usman Block New Garden Town,
Lahore, Pakistan
Tel: +92-42-5869504-6
Fax: +92-42-5830425
Email: hammad.rashid@pacra.com
Website: www.pacra.com