Karachi: The Pakistan Credit Rating Agency Limited (PACRA) has assigned initial entity ratings to Sapphire Dairies (Pvt.) Limited, spotlighting the dairy company's robust integration and strategic initiatives under the Sapphire Group's diversified business umbrella. This rating decision reflects the company’s solid industry position and forward-looking business strategies in the dairy sector.
According to The Pakistan Credit Rating Agency Limited announcement issued on 07 Aug 2024, Sapphire Dairies is part of the well-established Sapphire Group, which operates across various sectors including power, cement, real estate, and now dairy. The company has been recognized for its advanced operations in dairy farming, featuring a fully automated milk collection system and a processing unit that adheres to international quality standards. The primary revenue for Sapphire Dairies comes from raw milk, with significant contributions from other dairy and fruit beverages.
During the first nine months of fiscal year 2024, Sapphire Dairies reported a substantial increase in revenue, driven largely by inflationary pressures on milk prices and gains from livestock revaluation. The company's strategic shift towards exporting fruit beverages and its innovative approaches to improving dairy cattle genetics are seen as pivotal to its growth. Despite challenges like raw milk price volatility and feed availability, the company maintains a moderately leveraged capital structure, with adequate cash flows and financial risk management practices.
The continuation of these positive trends and the successful expansion into export markets are expected to play crucial roles in sustaining and potentially enhancing the company’s credit ratings in the future.