Press Release

JCR-VIS Reaffirms Ratings of Al-Noor Sugar Mills Ltd at A-/A-2

Karachi, November 25, 2013: JCR-VIS Credit Rating Company Limited (JCR-VIS) has reaffirmed the entity ratings of Al Noor Sugar Mills Limited (ASML) at ‘A-/A-2’ (Single A Minus/ A-Two). Outlook on the assigned ratings is ‘Stable’.

The local sugar industry continues to face challenges as prices in the domestic and international market have remained depressed for an extended time period. Prices of sugarcane are regulated by the Government of Pakistan and have depicted a rising trend while market prices of the processed commodity are expected to remain range bound over the foreseeable horizon on account of surplus sugar production.

ASML primarily produces white refined sugar and has also diversified its operations by engaging in the manufacturing of Medium Density Fiber Board (MDFB). ASML also supplies surplus power generated during the crushing season to Water & Power Development Authority. Given improvement in sucrose recovery rate, gross margins were higher during FY13 supplemented by increased volumetric and export sales. While MDFB division continues to support the revenue stream, the division faces stiff competition in the market owing to which margins have declined over the last few years. Overall profitability of the company improved during FY13 on account of improved performance of the sugar division.

Long-term debt of the company continued to increase on a timeline basis; debt servicing coverage remains adequate with improved cash flows reported in the out-going year. Short term borrowings remain a function of unsold stock and raw material inventory. While liquidity position of the company came under pressure during FY12, the same improved during FY13 on the back of better profitability.

For further information on this rating announcement, please contact Mr. Javed Callea (Ext: 501) or Ms. Sobia Maqbool, CFA (Ext: 604) at 021-35311861-70 (10 lines) or fax to 021-35311873.

Jamal Abbas Zaidi
Deputy CEO

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 2013 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