Press Release

VIS Reaffirms Rating of Faisalabad Oil Refinery (Pvt.) Limited

Karachi, April 08, 2020: VIS Credit Rating Company Limited (VIS) has reaffirmed entity ratings of Faisalabad Oil Refinery (Pvt.) Limited (FORL) at ‘BBB+/A-2’ (Triple B Plus/A-Two). The medium to long-term rating of ‘BBB+’ denotes adequate credit quality with reasonable 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 ratings is ‘Stable’. The previous rating action was announced on June 28, 2019.

The ratings assigned to FORL take into account its association with Madinah Group, having business stake in various sectors encompassing edible oils, sugar, ethanol, power generation, mass media and steel. The assigned ratings reflect stable business model, positive trajectory of sales and sound liquidity profile. Furthermore, ratings draw comfort from integrated production facility, profound distribution network along with well-established brand. Minimal reliance of the company on long term financing, adequate coverages and positive demand prospects of edible oil have also provided strength to the business. However, the ratings are constrained due to suppressed margins and highly price sensitive import market of raw material.

Oil & ghee industry, being a consumer goods industry supplying essential food items, is expected to be least impacted by the ongoing Covid pandemic crisis. Although product movement has been allowed, some supply chain issues may be faced in case lockdown is extended. Also a slowdown in receivable collection is expected. The ratings would remain dependent on the timing of lifting of lockdown, longer duration thereof may have an impact on ratings, going forward.

For further information on this rating announcement, please contact Ms. Maham Qasim (042-35723411-13, Ext. 8005) and/or the undersigned at 021-35311861-66 (Ext. 306) or email at

Faryal Ahmad Faheem
Deputy CEO

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 2020 VIS Credit Rating Company Limited . All rights reserved. Contents may be used by news media with credit to VIS .

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