Press Release

JCR-VIS Upgrades Entity Rating of Matco Rice Processing (Pvt.) Limited

Karachi, May 27, 2011: JCR-VIS Credit Rating Company Limited (JCR-VIS) has upgraded the medium to long term entity rating of Matco Rice Processing (Pvt.) Limited (Matco) to ‘BBB+’ (Triple B Plus) from ‘BBB’ (Triple B). The short term rating has been maintained at ‘A-3’ (A-Three). Outlook on the rating is ‘Stable’.

Matco is an export-oriented unit, primarily engaged in processing and export of rice. In line with the increase in country’s rice exports, Matco has also been able to significantly increase its sales revenue during the last three years owing to both increased sales volume and improved prices in local currency terms. The latter has also impacted margins of the company that remained consistent and stable till FY09 vis-à-vis increased cost; though reducing considerably during the outgoing year on account of decline in international prices. Margins during the first nine months of the current year have improved on account of recent upturn of prices in international market.

During FY2010, Matco had undertaken phase wise capital expenditure in order to set-up an integrated production facility at Kamoke, Punjab. With successful completion of phase -1 in the current ongoing year, production capacity of Matco has enhanced further. The management envisages phase-II capital expenditure to be funded by internal cash generation. Despite rising level of debt on account of increased working capital requirements to finance increased inventory maintenance costs, cash flow generation capacity has remained strong and debt servicing ability is also deemed to be sound.

For further information on this rating announcement, please contact Mr. Javed Callea (Ext: 501) or Ms. Sabeen Saleem (Ext: 510) at 021-35311861-70 or fax to 021-35311873.

Faheem Ahmad
President & CEO

Information herein was obtained from sources believed to be accurate and reliable; however, JCR-VIS Credit Rating Company Limited (JCR-VIS) does not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information. JCR-VIS, the analysts involved in the rating process and members of its rating committee do not have any conflict of interest relating to the rating(s)/ranking(s) mentioned in this report. JCR-VIS is not an NRSRO and its credit ratings are not NRSRO credit ratings. JCR-VIS is paid a fee for most rating assignments. This rating/ranking is an opinion and is not a recommendation to buy or sell any securities. Copyright 2011 JCR-VIS Credit Rating Company Limited. All rights reserved. Contents may be used by news media with credit to JCR-VIS.

JCR-VIS Credit Rating Company Limited