Press Release

JCR-VIS Reaffirms Entity Ratings of Century Paper & Board Mills Limited

Karachi, May 23, 2016: JCR-VIS Credit Rating Company Limited (JCR-VIS) has reaffirmed the entity ratings of Century Paper & Board Mills Limited (CPBM) at ‘A+/A-1’ (Single A Plus/A-One). Outlook on the rating is ‘Stable’. The previous rating action was announced on December 15, 2014.

The ratings assigned to CPBM take into account the improving financial performance as reflected in its cash flows and adequate debt servicing coverage. Furthermore, rating incorporates strong sponsors’ support that the Company garners with majority shareholding resting with Lakson Group of Companies.

CPBM enjoys its position in the market through paper, paperboard and corrugated boxes, with paperboard as its flagship product. The Company posted a profit of Rs. 194m for 9 months ended on March 31, 2016. Despite the reduced prices of its flagship product i.e. paperboard, constituting around 75% of total sales, CPBM posted improved financial results because of declining cost of inputs; both fuel and raw material. The market conditions have improved compared to FY15 where owing to fierce competition from China and soaring costs of inputs, profit margins were adversely affected.

The COGEN-III 18 MW Power Plant is in its testing phase and is expected to be operational by end of May 2016, which will meet above half of the Company’s energy requirements and will be a source of cost-effective energy. This plant was largely financed through debt and with the plant coming online, will enable the Company to enhance its capacity utilization to increase quantum of profits. Coupled with the repayments over the coming years, leverage indicators are expected to revert back to their normal levels.

For further information on this rating announcement, please contact the undersigned (Ext: 508) or Mr. Javed Callea (Ext: 501) at 35311861-70 or fax to 35311873.

Mohammad Khalid Ali

Applicable Rating Criteria:
Industrial Corporates (October 2003)

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 2016 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