Press Release

VIS Assigns Positive Outlook to Entity Ratings of Ittehad Chemicals Limited

Karachi, August 26, 2019: VIS Credit Rating Company Limited (VIS) has maintained the entity ratings of Ittehad Chemicals Limited (ICL) at ‘A-/A-2’ (Single A Minus/A-Two). Outlook on the assigned ratings has been revised from ‘Stable’ to ‘Positive’. The medium to long-term rating of ‘A-’ signifies 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. The previous rating action was announced on January 25, 2018.

The revision in the outlook reflects the expected efficiencies and revenue generation emanating from technological modernization. The ratings assigned to ICL take into account its prominent and stable position in chlor-alkali sector. The ratings derive strength from positive impetus in profitability supported by volumetric growth in sales along with improvement in gross margins. The ratings draw comfort from adequate coverages and comfortable gearing levels. Further, improvement in production related operational efficiencies and diversification in revenue stream to curtail the impact of increased power and finance cost are conducive to the assigned ratings. Ratings are dependent upon achievement of projected topline growth in turn increasing profitability and leading to strengthening of capitalization and leverage indicators.

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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