Lahore, August 30, 2023 (PPI-OT): Golden Packages (Pvt.) Limited (“GPL’’ or “the Company”) is predominately manufacturing Cast Poly Propylene (CPP) Films and flexible packaging. The demand for the product is derived mainly from the food industry and consumers. The strong customer base of the Company bodes well for the assigned rating. The Company is wholly owned by family members. The sponsor’s family has vast experience in packaging and engaged in this business since 1991. The raw material of the finished product is ~100% imported hence, exposed to exchange rate risk. As per management representation, the Company’s market share in the overall industry is ~30%, whereas, the Company is the major supplier of flexible packaging in the KPK region. Almost 70% of the total sales of the Company are made to KPK.
The Company has expanded its capacity year by year, from ~2,700 MT/annum in FY20 to ~18,000 MT/annum tons in FY23, and going forward to meet the ongoing demand for the CPP Films, GPL recently imported a new plant, which will enhance the production capacity to 20,000MT/annum. The internal audit department is operating under the direct supervision of directors due to which the Company has an effective mechanism for the identification, assessment, and reporting of all types of risk arising out of the business operations. With no MIS system in place at GPL, the room for improvement concerning IT systems is massive, including the GPL’s website which is still in the developing phase.
On the financial profile side, the Company has generated a topline of ~ PKR 3,426mln during 9MFY23 as compared to ~PKR 3,240mln in 9MFY22 with an increase of ~5.7% (FY22: ~PKR 4,320mln, FY21: ~PKR 3,948mln). Consequently, the bottom line of GPL has increased to ~PKR 427mln from PKR 375mln during the same period (FY22: ~PKR 500mln, FY21: ~PKR 467mln). The equity of the Company clocked in at ~PKR 2,796mln at the end of Mar-23 (FY22: ~PKR 2,369mln, ~FY21: PKR 1,869mln). The financial position of the Company is low leveraged with sound financial indicators as of the end Mar’23. Past trends of equity injection show strong financial commitments of the sponsors.
The ratings are dependent upon the management’s ability to improve margins while sustaining its market share. Prudent management of the working capital, and maintaining sufficient cash flows and coverages are essential for the ratings. Any significant change in margins and coverages will 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