Press Release

VIS Reaffirms Ratings of Madina Sugar Mills Limited

Karachi, July 24, 2019: VIS Credit Rating Company Limited (VIS) has reaffirmed the entity ratings of Madina Sugar Mills Limited (MSML) at ‘A-/A-2’ (Single A Minus/A-Two). The medium to long-term rating of ‘A-’ denotes good credit quality with strong protection factors. Moreover, risk factors may vary with possible changes in economy. The short-term rating of ‘A-2’ denotes good certainty of timely payments coupled with sound liquidity and company fundamentals. Outlook on the assigned rating is ‘Stable’. The previous rating action was announced on June 29, 2018.

The ratings assigned to MSML take into account its association with Madinah Group, having business interests in various sectors including edible oils, sugar, ethanol, power generation, mass media and steel. The assigned ratings take into account positive momentum in sales and enhanced diversification in ethanol business to curtail the cyclicality in sugar sector. Further, the ratings derive strength from positive impetus in profitability, sound coverages and adequate liquidity profile. The ratings also incorporate minimal reliance of the company on long-term financing, therefore gearing and leverage indicators have remained at comfortable levels, supported by growth in equity. However, the ratings remained constrained with significant stock of sugar and its price sensitivity, coupled with the inherent volatility of business risk in the sugar sector. Management of leverage and liquidity indicators along with additional contribution margins from the ethanol segment would be important, going forward.

For further information on this rating announcement, please contact the undersigned at 021-35311861-70 or Mr. Maimoon Rasheed at 042-35723411-13.

Javed Callea

Applicable rating criterion: Corporates (May 2019)

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 2019 VIS Credit Rating Company Limited . All rights reserved. Contents may be used by news media with credit to VIS .

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