Fitch rates Abans Limited at 'A(lka)'

Fitch Ratings has assigned an 'A(lka)' National Long-term rating to Abans (Pvt) Limited (Abans), a press release said.

The Outlook on the rating is stable where the rating takes into account Abans' position as one of the country's leading retailers of consumer electronics and household appliances, where the company's financial profile and key credit metrics is sound for the current rating.

Over the years, Abans, which caters primarily to the middle- and upper-income segments of the population has reported robust growth in sales and operating profits and has grown its market share within the industry. Its main brand, LG, accounts for broadly 60% of Abans's revenues. However Fitch noted that Abans' new distributorships have reduced this gradually over the last five years.

Abans generates more than half of its revenues from the Western province of the country, given that its product offerings mostly cater to the high-and-middle-income segments. The Company’s total revenues and operating profits amounted to Rs. 10,529 million and Rs. 1,096million, respectively during the 2007 financial year . Revenue growth was 26% over the previous fiscal period, supported by volume growth of 10%-15% in its main product categories.

Issuing a press release Abans (Pvt) Limited said that as at end-September 2007, the company's total debt amounted to Rs.2,275million and most of which comprised of short-term facilities. However, the agency noted that management has taken initiatives to finance part of its operations through long-term debt instruments to improve its debt maturity profile.

Abans had Rs1.3 billion of committed un-drawn credit facilities and Rs. 240 million of cash reserves at September 2007 to provide additional liquidity support.

. Fitch noted that the company has taken steps to improve its information systems to cater to the demands of the expanding business and resulting operational risks.
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