Lahore, June 29, 2023 (PPI-OT): Yunus Textile Mills Limited (YTML) is a prominent textile venture of the Yunus Brothers Group. The group companies operate under the umbrella of YB Holdings - the flagship Hold Co of the group. Yunus Brother’s Group has a robust financial profile with a diversified presence in sectors including power generation, building materials, real estate, textile, chemicals, pharmaceuticals, food, and automotive sectors. Sponsors exercise oversight of the businesses and professional management, are well-equipped and well-experienced, and spearhead the individual companies. Strategic direction is meticulously worked out and rigorously followed once decided and finalized.
YTML is amongst the leading home textile exporters in the country. The Company consists of spinning, weaving, dyeing, printing, finishing, cutting and sewing. It has 166,160 spindles and 5,016 rotors installed yielding a yarn capacity (on the basis of 20 counts) of 64m kgs. per year, which caters to around ~ 70% of YTML’s yarn requirement. Yunus Textile has a weaving capacity of 126m meters per annum and the utilization level for FY22 was reported at 90%. The Company enjoys an established customer base with several export destinations in European Countries and the United States of America. The company enjoys a strong franchise and is recognized as a quality product manufacturer with product lines ranging from bed sheets, comforters, duvets, quilts, and pillowcases to curtains and table linens. The rating reflects a steady revenue base in recent years.
The top line primarily consists of exports. Margins remained largely sustained where growth was recorded in revenue. YTML continues to maintain a Favourable capital structure and strong coverages signifying a robust financial profile.
During 9MFY23, the textile exports were valued at $12.47bln compared to $14.24bln, reflecting a 12% decline YoY - the declining trend has been recorded in the last two quarters. In the month of March, Knitwear, Readymade Garments, Bedwear, and Towels increased by 18%, 13%, 5%, and 2% MoM respectively. Moreover, a slowdown is prevailing in textile demand amid burgeoning inflationary pressures in the exporting destinations, especially in the US and European countries. The demand pattern is expected to improve in the upcoming quarters.
The ratings are dependent on the Company's ability to sustain its core margins and profitability. Preserving a low-leveraged capital structure and sound coverages remains imperative.
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
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