Press Release

VIS Assigns Initial Entity Ratings of A/A-1 to Maple Leaf Cement Factory Limited

Karachi, April 02, 2020: VIS Credit Rating Company Limited has assigned initial entity ratings of ‘A/A-1’ (Single A Plus/A-One Plus) to Maple Leaf Cement Factory Limited (MLCF). The long term rating signifies good credit quality with adequate protection factors. Risk factors are considered variable if changes occur in the economy. Short term rating of ‘A-1’ depicts high certainty of timely payments. Liquidity factors are excellent and supported by good fundamental protection factors, risk factors are minor. Outlook on the assigned rating is ‘Stable’.

The assigned ratings to MLCF incorporate the company’s market position as one of the leading cement players in the country. Ratings also reflect the company’s satisfactory and efficient operations with MLCF being one of the low cost producers in the cement sector. Ratings are constrained by current challenging sector dynamics and weakening in financial profile over time. However, MLCF’s reprofiling of all long-term debt till end-FY21 from proceeds of rights issue provides support to ratings. Comfort is drawn from healthy financial profile, ample liquidity of Kohinoor Maple Leaf Group which can be drawn upon in case of debt servicing requirements.

Business risk profile incorporates cyclical nature of the cement industry. Over the last one year, cement sector has entered competitive phase with increasing capacities exerting pressure on selling prices which has been compounded by rising cost of inputs. Demand patterns synchronizing with substantial supply side dynamics will be important for improvement in sector dynamics. In this regard, proposed commencement of infrastructure projects would support dispatches and sector outlook. VIS expects sector dynamics to improve gradually over the rating horizon although short-term dispatches may be impacted due to recent coronavirus outbreak.

Maple Leaf Cement Factory Limited (MLCF) is principally engaged in production and sale of cement. Production factory of the MLCF is situated in Iskanderabad Distt: Mianwali. The company is a subsidiary of Kohinoor Textile Mills Limited (‘the Holding Company’). The company is part of Kohinoor Maple Leaf Group which has presence in cement, textile, power and capital markets. Maple Leaf Power Limited is 100% owned subsidiary of MLCF, established to operate 40MW coal fired power generation plant.

For further information on this rating announcement, please contact Mr. Talha Iqbal (Ext: 213) or the undersigned (Ext. 306) at 021-35311861-70 or email at .

Faryal Ahmad Faheem
Deputy CEO

Applicable Rating Criteria: Industrial Corporates - April 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 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 2020 VIS Credit Rating Company Limited . All rights reserved. Contents may be used by news media with credit to VIS .

VIS Credit Rating Company Limited