Karachi: The Pakistan Credit Rating Agency Limited (PACRA) has assigned entity ratings to Jazaa Global (Private) Limited, reflecting the company's robust financial profile and effective market strategies. Jazaa Global, known for its diverse portfolio of ethnic products, serves over 55 countries and 100 cities across Pakistan, with a significant production capacity in Karachi.
According to The Pakistan Credit Rating Agency Limited announcement issued on 30 July 2024, Jazaa's ratings are supported by its extensive industry experience and strategic insights, which enhance its operational capabilities. The company manages a broad range of over 200 stock-keeping units, with rice and salt being its core products. The production capacities are substantial, with 40,400 metric tons of rice and 4,000 metric tons of salt produced annually. The financial assessment is buoyed by the sponsors' committed support in times of financial need.
Jazaa operates effectively in both local and international markets, deriving about 50% of its revenue from exports. The company's revenue composition is heavily influenced by rice sales, which contribute approximately 60% to the total revenue. In FY23, Jazaa achieved a revenue increase of approximately 37% from the previous year, reaching about PKR 1,703 million. However, challenges such as rising raw material costs and higher finance costs have impacted the gross profit margin, which declined from approximately 36.5% in FY22 to about 26.9% in FY23.
Despite financial pressures, Jazaa's management has effectively navigated market dynamics, maintaining a moderately leveraged capital structure and demonstrating strong financial management skills critical for sustaining its credit profile. The company's strategic response to market conditions and adherence to global standards in product quality and customer satisfaction are vital components of its credit assessment.
The ratings remain sensitive to the company's ability to manage working capital effectively, sustain profit margins, and maintain sufficient cash flows for expansionary activities. Prudent financial discipline is deemed crucial for retaining the current ratings.