Lahore, November 23, 2021 (PPI-OT):Airlink Communication Limited (hereafter referred as ‘Airlink’ or ‘the Company’) is primarily engaged in the distribution business followed by retailing and assembling of smartphone devices in Pakistan. The ratings reflect Airlink’s sustained fundamentals underpinned by its solid market position and diversified earnings from its core business lines. Telecom is one of the fastest growing sectors of Pakistan’s economy. The government has given industrial status to the telecom sector in the federal budget for fiscal year 2021-22. Telecom industry in Pakistan has shown growth over the period on account of trade and investment liberalization, favourable policies, and healthy competition.

Regulatory duty on mobile phone imports has been increased to promote local import substitutes and attract foreign investment. Consequently, the Company now captures market share of around ~21% in mobile distribution. Topline continued to witness reasonable growth on a Year-on-Year basis owing to the formidable local demand of mobile handsets. Airlink has been successful to effectively manage business risks by partnering up with multiple global mobile phone brands including Samsung, Itel, Techno, Iphone, Xiaomi, Alcatel, and Huawei. The Company conducted the largest IPO in Pakistan worth PKR 6.43bln during Aug’21.

Proceeds from IPO are to finance working capital requirements and expand the Company’s distribution and retail network. Funds received from issuing stocks has ramped up company’s equity. Thus, making the capital structure moderately leveraged mainly comprising of short-term borrowings. With its legal status converted into a Public Listed Entity in Sep’21, several improvements in the governance structure are witnessed including induction of three independent directors. Lately, Airlink joined hands with Xiaomi, a global electronics and smartphones brand, to manufacture Xiaomi mobile phones in Pakistan through its wholly owned subsidiary “Select Technologies (Pvt) Limited”.

Financial Profile of the Company is considered adequate with comfortable coverages, upright working capital management and healthy cash flows. The ratings are dependent on the company’s ability to sustain its relative position and positive performance indicators amidst growth. As business volumes grow, prudent financial discipline – particularly in capital structure, is essential to uphold 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