Press Release

JCR-VIS Reaffirms Entity Ratings of Century Paper & Board Mills Limited

Karachi, December 11, 2017: JCR-VIS Credit Rating Company Limited (JCR-VIS) has reaffirmed the entity ratings of Century Paper & Board Mills Limited (CPBM) at ‘A+/A-1’ (Single A Plus/A-One). Outlook on the rating is ‘Stable’. The previous rating action was announced on May 23, 2016.

Ratings assigned to CPBM take into account the volumetric growth as well as recuperation in margins; which led to improvement in the financial performance of the company. Furthermore, rating incorporates strong sponsors’ support that the company garners with majority shareholding resting with Lakson Group of Companies. CPBM enjoys a leadership position in Paper and Paperboard market with Coated Packing Board as its flagship product. Ratings also incorporate the imposition of anti-dumping duty on Chinese imports which may serve to alleviate risk of margin reduction.

Due to shift in industry dynamics, price of Chinese imports related to paperboard increased which improved competitiveness of CPBM’s products. This led the management to increase production levels. On the back of volumetric growth, favorable adjustment in product price as well as continuous supply of energy, CPBM posted improved profitability. Resultantly, cash flows in relation to outstanding liabilities improved on a timeline basis. Going forward, CPBM expects volumetric growth in the coming years through the set-up of a new PM-8 plant which will increase the existing capacity by about 55% and may translate into higher cash flows.

Capitalization levels of the Company are currently adequate. However, in the wake of payment of preference dividend and increase in working capital requirements resulted in higher short-term borrowing which have pushed leverage indicators slightly upward.

For further information on this rating announcement, please contact the undersigned (Ext: 201) at 021-35311861-71 or fax to 021-35311872-3.

Javed Callea

Applicable Criteria: Industrial Corporates (May 2016)

Information herein was obtained from sources believed to be accurate and reliable; however, VIS Credit Rating Company Limited 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.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.VIS is not an NRSRO and its credit ratings are not NRSRO credit ratings.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 2017 VIS Credit Rating Company Limited. All rights reserved. Contents may be used by news media with credit to VIS.

JCR-VIS Credit Rating Company Limited