Cirtek Holdings Philippines Corp. (CHPC) has received a PRS A (corp.) rating with a stable outlook from the Philippine Rating Services Corp. (PhilRatings), as the company plans to continue issuing up to P2 billion in commercial papers.
According to PhilRatings, a PRS A (corp.) rating means the company has “an above average financial capacity” to meet their commitments relative to other Philippine firms. However, it may be “more susceptible” to adverse changes in economic circumstances than those who received higher ratings.
In a statement, PhilRatings said it assigned the PRS A rating to CHPC taking into account the improvement in leverage levels, and its track record.
It cited CHPC’s strong customer base which includes well-established global companies in different regions and industries, as well as the improvement in profits in the first nine months of 2021.
CHPC reported a 6% increase in consolidated revenues to $62.8 million in the nine-month period in 2021, driven by higher demand for the semiconductor and antenna manufacturing businesses.
Net income more than doubled to $8.1 million in the January to September period, from $3.6 million in the same period in 2020. CHPC’s net profit margin rose to 13% during the first nine months of 2021, from 6% in the year prior.
“Although the outlook is positive at present, the industry is highly competitive, cyclical, and is susceptible to adverse changes in various economies, and is characterized by the presence of larger international players,” PhilRatings said.
The tech company, which focuses mainly on wireless communication, is the parent of Cirtek Electronics Corporation, Cirtek Advanced Technologies and Solutions, Inc. and Quintel USA, Inc.
“On a positive note, the telecommunications (telecom) sector, which comprises a huge portion of Quintel’s customers, currently has a positive industry outlook which serves as an opportunity for the company,” it added.
CHPC offers products and services to customers in the U.S., Asia and Europe, which account for 46%, 33% and 21% of its revenues.
“Such exposes CHPC to diversified risks relating to the performance of the economies where these customers are based, particularly with the impact on economies brought about by the COVID-19 pandemic,” PhilRatings said.
A stable outlook means the rating is likely to remain unchanged in the next 12 months.
